After US east coast, Jet looks to connect with Pacific coast cities

After US east coast, Jet looks to connect with Pacific coast cities
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First Published: Tue, Apr 01 2008. 01 26 AM IST

A Jet Airways aircraft at the Delhi airport.  Jet, India’s largest airline group by passengers carried, added more than half of the existing 14 international routes it flies in the past year (Photo by
A Jet Airways aircraft at the Delhi airport. Jet, India’s largest airline group by passengers carried, added more than half of the existing 14 international routes it flies in the past year (Photo by
Updated: Tue, Apr 01 2008. 01 26 AM IST
After having connected key cities on the US east coast as part of its expanding international operations in the past six months, India’s largest airline group by passengers carried, Jet Airways (India) Ltd, will next focus on connecting the Pacific coast of the US including Los Angeles and San Francisco through this year.
Given the excess capacity in the domestic airline market, which saw three acquisitions through fiscal 2008, Jet has earmarked a 40% growth of its international business compared with a domestic growth of 12-15% in fiscal 2009. National Aviation Co. of India Ltd-run Air India, the country’s largest international carrier, flies to more than two dozen international cities and Kingfisher Airlines Ltd too plans to make good use of the 10 new wide-body aircraft it inducts this financial year.
A Jet Airways aircraft at the Delhi airport. Jet, India’s largest airline group by passengers carried, added more than half of the existing 14 international routes it flies in the past year (Photo by: Rajeev Dabral / Mint)
Jet added more than half of the existing 14 international routes it flies in the past year.
In the last fortnight alone, the civil aviation ministry approved two other key permissions sought by the airline. Jet has been granted rights to fly to Shanghai, after negotiations with the Chinese aviation authorities, and connect San Francisco with daily flights; and fly to Hong Kong and connect either Los Angeles or San Francisco.
“We have plans to do this. It could be later this year, after we get aircraft, or early next year,” the airline’s executive director Saroj Dutta said, referring to flights to Los Angeles from India with a stop at Hong Kong.
Jet is launching its daily flights to Hong Kong from Mumbai and will follow with flights from New Delhi with its Airbus SAS-made A330 aircraft. These could be eventually extended to Los Angeles after long-haul aircraft are inducted as the A330s, Dutta said, are not capable of flying “over the Pacific.”
Flights to San Francisco via China’s business capital Shanghai are scheduled to start in May, in time to tap into traffic dominated by people visiting India in the summer vacations. These flights will use long-haul Boeing 777-300 LR aircraft that have been so far unutilized in the absence of mandatory Chinese approvals.
Dutta said the Mumbai-based airline will continue to serve the US east coast via its European hub in Brussels. Currently, flights from New Delhi, Mumbai and Chennai converge in Brussels, taking the traffic forward to New York, Newark and Toronto.
Jet has brokered code sharing agreements with AMR Corp.’s American Airlines to add feeds from smaller US cities to its flights back to India—much on the lines of a similar agreement in the Asia-Pacific region with Qantas Airways Ltd that feeds its Singapore flights with Australian traffic.
Additional traffic through these agreements, the airline hopes, will allow it to break-even on long-haul routes within the industry norm of 12-18 months. “We are willing to wait it out to the extent that it takes that time, and we believe that by the end of fiscal 2009 or early fiscal 2010 is when most of our routes that we have started in the current fiscal will start breaking even or even (start) contributing positively to the bottom line,” the airline’s senior general manager (finance) K.G. Vishwanath told an analysts call in late January in response to the airline’s losses. In the third quarter this fiscal year, Jet lost about $33.1 million or Rs132.4 crore, compared with a Rs40 crore profit same time last year, of which $29.4 million was accounted for by its launch of international operations.
Rival Air India and Kingfisher Airlines already have their strategies in place for the US market involving non-stop flights but, an analyst said, which of three will do better will depend on who has a tight rein on costs and appeals to customers.
“I don’t think the market is a limiting factor for Indian carriers to tap into. The challenge really is how do you establish yourself in their (passengers’) minds and who of the three will be able to capture that market profitably in the long term by keeping the costs under control,” said Kapil Arora, an analyst with Ernst and Young’s India offices.
Heavy investment in strategic branding and ground infrastructure will, however, push up the start-up costs, especially for Jet and Kingfisher, which are still not part of any global airline alliance and, therefore, cannot share airport infrastructure with local carriers. “Business class travellers,” Arora said, “prefer to fly non-stop while for leisure segment it is the comfortable journey and pricing (one-stop flights) which matters the most.”
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First Published: Tue, Apr 01 2008. 01 26 AM IST