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Business News/ Companies / News/  Relief from high fares in sight with Jet set to fly 40 more planes

Relief from high fares in sight with Jet set to fly 40 more planes

Airfares which have firmed up in recent weeks are set to stabilise
  • SpiceJet leasing some of Jet's grounded planes will address airline industry's recent capacity reduction
  • India's Jet Airways Chairman Naresh Goyal speaks during a news conference to announce a code sharing agreement with United Arab Emirates Etihad Airways in Mumbai June 10, 2008. REUTERS/Punit Paranjpe/Files (Reuters)Premium
    India's Jet Airways Chairman Naresh Goyal speaks during a news conference to announce a code sharing agreement with United Arab Emirates Etihad Airways in Mumbai June 10, 2008. REUTERS/Punit Paranjpe/Files (Reuters)

    New Delhi: A day after it was rescued by lenders, Jet Airways (India) Ltd outlined plans to fly more planes and restart some of its cancelled flights even as the Mumbai airport plans to take away more unused slots of the carrier.

    Jet Airways plans to restart about 50 flights by the end of this month and add 40 grounded planes by April-end, two people familiar with the development said on Tuesday.

    Also, the airline’s newly reconstituted board is expected to meet next week to discuss steps to nurse the airline back into financial health.

    The plans come as Naresh Goyal, the founder of Jet Airways, announced his exit on Monday from the board and chairmanship of the airline plagued by large debt and unpaid dues to staff, vendors and plane lessors.

    The 50 flights were earlier suspended till 25 April. Resuming these flights and bringing back the grounded planes would help stabilize airfares in India, which have firmed up in recent weeks.

    Civil aviation secretary Pradeep Singh Kharola, who met Jet Airways chief executive officer Vinay Dube and State Bank of India (SBI) chairman Rajnish Kumar in New Delhi earlier on Tuesday, said the airline had assured there would be no more grounding of planes.

    Speaking to reporters after the meeting, Dube said he was optimistic of the airline making a quick turnaround. While the emergency debt of 1,500 crore approved by the SBI-led lenders comes as a lifeline to the carrier, it will need more capital to get back to normalcy. The reconstituted board will also preside over bringing in a new investor by the end of June.

    With about 35 aircraft doing nearly 150 flights a day, the addition of 50 flights will grow Jet’s operations from about 25% of its full capacity of 600 flights to about 33%, said the first person on condition of anonymity. When 40 of the grounded aircraft too are added, Jet will have 75 aircraft in operation, compared with its original fleet of 119.

    Lessors to Jet grounded its aircraft due to non-payment of dues.

    In the meeting, Jet informed the government that it had initiated talks with the lessors on Monday and would submit a plan by next week.

    On Monday, the lenders took a controlling stake of just over 50% in Jet Airways and announced plans to start a bidding process to sell their stake in the airline to a new investor in the June quarter.

    Jet has been asked to submit its plans for aircraft induction to the Directorate General of Civil Aviation (DGCA), which will clear them for putting into service. In the meantime, as a temporary measure, the authorities may grant Jet’s flying slots to other airlines till Jet is able to use them.

    One of those airports is Mumbai where the operator, Mumbai International Airport Ltd (MIAL) plans to give away more unused slots of Jet to rival airlines, two people with direct knowledge of the matter said.

    As of January, Jet Airways had 106 departure and arrival slots each per day at its hub in Mumbai’s Chhatrapati Shivaji Maharaj International Airport.

    “Mumbai is Jet Airways’ home hub and the airline operates the maximum number of flights from the city. Due to the recent grounding of its aircraft, the airline was constrained to temporarily reduce the level of operations," a Jet spokesperson said. “Jet Airways is making every effort, in close cooperation with the ministry and MIAL, to restore operations to the peak level within the next 4-8 weeks, based on the plan put forth by the airline."

    MIAL did not respond to queries till press time.

    Kharola said the DGCA is keeping a close watch on Jet Airways’ operations, including fares, safety, booking of tickets and cancellations. He said an assessment has showed that most of the grounded planes are in good condition.

    Separately, pilots of Jet Airways, who haven’t received salaries for the past few months, have written to the SBI chairman seeking clarity on their future.

    “It is our humble request to you to alleviate some of the hardships that we and the AMEs (aircraft maintenance engineers) have been facing by ensuring that the Jet Airways management does not further delay the release of our pending salaries," Tej Sood, general secretary of Jet Airways pilots union, National Aviators Guild, said in a letter.

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    Gireesh Chandra Prasad
    Gireesh writes on the Indian economy, government policy, regulatory developments and trends in the business landscape. His areas of reporting include finance, taxation, company law, bankruptcy code, competition law, financial reporting and auditing. He also covers federal policy think tank NITI Aayog.
    Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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    Published: 26 Mar 2019, 09:36 AM IST
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