Restricting complimentary meals to help Jet Airways cut costs; but long term impact questionable

Jet Airways’ steps to stop complimentary meals in most of its Economy seats will help reduce costs, but experts warn that such solutions could create greater problems in the long run.

On December 3, Jet Airways introduced two more fare categories under its Economy class — Saver and Classic — for domestic flights. Complimentary meals will now be restricted to those opting for the existing ‘Flex’ category in Economy and for all fare categories in Première.

The steps will matter for an airline that is losing almost Rs 15 crore a day and is in talks with investors to raise funds. Its management had laid down a roadmap to save Rs 2,000 crore in costs over the next two years.

Complimentary meals can cost anywhere between Rs 300 to Rs 1,200 a plate, depending on the food served, and the caterer.

Serving hot food on-board also needs a lot of infrastructure that adds to the weight of the flight. Hot meals weigh more than most of the items on the ready-to-eat menu.

“While a plate of a hot meal can weigh about 500 grams, a sandwich or upma with hot water will be about 200 gms. Now, when you multiply the difference in weight by the number of seats, a flight will be lighter and consume less fuel,” says Mark Martin, Founder and CEO of Martin Consulting LLC, an aviation advisory and consulting firm.

Fuel costs and fall in rupee have been the main culprits behind Jet Airways reporting huge losses for three consecutive quarters.

Jet Airways passengers on other Economy seats (Saver, Classic, Light and Deal) can now buy food and beverages from JetBistro, the onboard menu. The ready-to-eat menu will be available from January 7.

“This is a well-planned austerity move,” adds Martin.

Longer term impact

But will passengers take kindly to Jet Airways ‘almost’ becoming a budget airline?

“Cost control strategies seldom work and such solutions create greater problems in the long run,” says Shakti Lumba, aviation professional and former Executive Director Airline Operations (Alliance Air) and Vice President Ops (IndiGo).

He adds that steps like these can lead to passenger confusion and resistance, brand dilution and even loss of loyalty.

And despite removing complimentary meals in most Economy seats, Jet Airways may still have to incur some associated costs.

“These (measures to cut costs) are low lying fruits. There are still associated costs that a full-service airline incurs, and a low-cost carrier (LCC) like IndiGo does not incur. These include maintaining a full catering department, maintaining an inventory of catering equipment and wastage. A full-service carrier still incurs these costs,” says Lumba.

[“source=ndtv”]