BackJet looks to expand international routes; to hold fares
Jet looks to expand international routes; to hold fares
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Mumbai: Jet Airways (India) Ltd, India’s largest airline by market share, is looking to add routes in the South East Asian and Gulf markets in the next one or two quarters to expand its international operations, a senior official said on Monday.
Jet’s international operations account for 57% of total sales and the carrier had seen healthy load factors of more than 80% on these routes in the first quarter.
“In the near term, that is in the next one or two quarters, we are looking to expand to south east Asian routes as well as Gulf routes with (Boeing) 737 aircraft," K.G. Vishwanath, vice president, commercial strategy and investor relations, said in a conference call with analysts.
“It’s only starting from next year winter when we have four new wide body aircraft that we are looking to add incremental capacity to Europe," Vishwanath said.
The airline is planning to add 4-6 narrow bodied aircraft this year, which will be deployed on international and domestic routes, he added.
Domestic passenger traffic rose 17.7% to 29.8 million passengers in the first half of the year and the Jet group, which includes budget carrier JetLite, recorded the highest market share of 25.5%.
The airline was also in the process of discussing the possibility of merging JetLite with its other low-fare brand, Jet Konnect, he said.
“We are still in the process of discussing whether there is a need to merge JetLite and Jet Konnect, but we are very clear that there will be only one brand in the low-fare arena and that is something which will emerge very clearly in the next one or two months."
Last week, Jet had posted a much lower-than-expected June quarter net loss on better revenue and a one-time gain, but the carrier cautioned high fuel and intense competition hurt performance. . Fuel costs made up about 42% of its total costs during the first quarter.
“In the current environment it is difficult for us to pass through incremental costs of fuel largely because it is the weakest quarter of the year," Vishwanath said.
“We will possibly wait for another month or two before taking further pricing action".
Jet is also “actively pursuing" sale and lease back opportunities and could see 3-4 aircraft being sold and leased back in the current quarter, Vishwanath added.
Sale and lease back is a process where airlines sell planes to a leasing firm which then leases aircraft back to the original owner, thereby helping firms save on capex.
Jet also expects to close a deal to develop its land bank in the Bandra-Kurla Complex in Mumbai within the next two weeks.
Shares of Jet, valued at about $971 million, closed 1.36% lower at 492.65 rupees each in a firm Mumbai market.
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