Even as domestic carriers are lobbying hard to fly abroad in an effort to utilise capacity better, Mumbai-based full service carrier Jet Airways has deferred the commencement of its Delhi-Hong Kong operations.
Sources in the company said that the flights, which were supposed to begin from June, may have been delayed till November.
"We have decided to defer our Delhi-Hong Kong flights as we found it necessary to deploy that capacity on other routes," said Executive Director Saroj K Datta, refusing to divulge more details.
Sources close to the development, however, said that the operations to Hong Kong had been deferred due to the delay in deliveries of some of their Boeing aircraft that were supposed to be deployed on the India-US route. Jet has ordered 10 Boeing aircraft and exercised its options for three more. These three have been scheduled to be delivered between 2007 and 2009.
"The delay in deliveries of some of the Boeing aircraft has compelled Jet to deploy the Airbus A330, which was supposed to be used on the Delhi-Hong Kong route, on the US route," said a source. Jet took the delivery of one of its A330s last month. This was supposed to be deployed on the Delhi-Hong Kong route. Two more A330s are to be delivered during the year.
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Senior Jet Airways executives, however, denied that there was any delay in aircraft deliveries.
Jet begun flights on the A330-operated Mumbai-Hong Kong sector last August. At present, there are close to 30 weekly flights between India and Hong Kong operated by Air India, Cathay Pacific and Jet Airways. Kingfisher is expected to start operations to Hong Kong from August when it gets permission to fly overseas. Experts say that going by passenger demand for travel, there is scope for around 25 per cent immediate increase in the flights in the India-Hong Kong sector. Apart from being a shoppers paradise and a tourist destination, Hong Kong also has an immense potential as a hub for other North Asian destinations, such as Beijing and Macau.
Jet Airways currently earns close to 40 per cent of its revenues from international operations. This chunk is slated to go up to 50 per cent in the next three or four years.
According to sources in the company, Jet has already broken even in some of the key Asian routes like Delhi-Singapore and Delhi-Kuala Lumpur. Delhi-Hong Kong was looked at as the next lucrative route.
During the beginning of this year, Jet had been planning to make Hong Kong its Asian hub for operations to the US. However, after getting the approval for fifth freedom rights (that is, using a destination as a point to operate further flights) from China, Jet decided to make Shanghai its hub.
With the recent rise in fuel costs, international operations have become an immensely important proposition to bail airlines out of a $2-billion loss projected for 2008-09. SpiceJet and IndiGo, among other airlines, have been pushing hard for permission to fly on international routes.
Though Jet had attributed its Rs 91.12 crore loss in the third quarter of 2007-08 (its first in five quarters) to additional expenditure in international operations, it had also said that it would break even on most of these routes in eighteen months from the start of operations.
In a recent meeting with the civil aviation ministry, Jet CEO Wolfgang Prock Schauer had said that they might cut their domestic flights by 20 per cent, which clearly meant that they would concentrate more on the international sectors.