Jet gameplan to get bigger share of global passengers

Jet Airways plans to increase capacity on international routes by reconfiguring existing aircraft and adding new ones

Jet Airways will ramp up capacity on international routes through a mix of aircraft reconfiguration and deployment the Airbus A330-300 planes, which have about 30 extra seats compared to A330-200. The move will enable Jet Airways to take on competition on the London and US routes, without increasing its fleet size.

International operations constitute about 60 per cent of Jet Airways’s revenue. Currently, it operates a mix of Boeing 737s (on Gulf routes), Airbus A330-200 (to the US, Singapore and Hong Kong) and Boeing 777-300s (to London).

Next month, Jet will add an Airbus A330-300 on lease, the first of the four such planes, which will be delivered till next April. Jet Airways has 11 Airbus A330 planes in its fleet, each seating 220 passengers. The new version will have about 30 extra seats.

The airline is also reconfiguring five Boeing 777 planes by adding more seats in the economy section. The economy section in the Boeing 777 has nine seats in a row and the airline will be adding an extra seat in each row, making it 10 seats in a row. The reconfiguration exercise will be complete by January. The airline has leased out its five 777s to Thai Airways.

Jet Airways posted a consolidated loss of Rs 166 crore in the second quarter FY13.

Although losses narrowed down from Rs 713 crore in same period last year, the airline continued to bear the brunt of high operating costs.

In the past few months, it scaled back capacity and withdrew from loss making sectors such as Johannesburg and New York. In the second quarter, the load factor on international routes dropped, but yields improved 28 per cent. However, with the cost structure remaining high, the unit costs increased 16 per cent. International operations recorded a pre-tax profit of Rs 45 crore, the airline said in its investor presentation.

Jet Airways will retain the existing fleet size as it is planning to sell or lease the Airbus A330-200s in its fleet.

The A330-300s will give us better economics with more seats at almost the same costs. The planes will be deployed on the India-Brussels-US routes. We are in the process of selling and leasing out the excess capacity of the Airbus A330-200s,” said Jet’s CEO Nikos Kardassis.

According to Kardassis, the airline is still to finalise the new routes for the next summer, but sources indicated that it may deploy the A330-330s on new sectors such as Munich. The airline has secured the civil aviation ministry’s permission to launch flights to Munich and Frankfurt, to expand its European network. These flights would help Jet align itself with German airline Lufthansa with which it proposed a code-sharing alliance and join the Star Alliance. However, Jet is yet to receive the government’s nod to join the alliance.

According to Kapil Kaul, CEO - south Asia, Centre for Asia Pacific Aviation (CAPA), International operations continue to be Jet’s strength. “The Q2 international results were better than expectation,” he said. CAPA expects the airline to do code-sharing with Lufthansa and join the Star Alliance before end of this fiscal year.

http://www.business-standard.com/india/news/jet-gameplan-to-get-bigger-shareglobal-passengers/491714/