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Jet cuts loss-making global routes, to lease out aircraft

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Press Trust Of India New Delhi
Last Updated : Jan 25 2013 | 2:49 AM IST

Amid difficult times for the aviation industry, Jet Airways has cut three of its biggest loss-making international routes and plans to lease four wide-body Boeing 777 aircraft, besides phasing out three Boeing 737 planes.

The carrier, which was overtaken last month by Kingfisher as the largest airline, discontinued the Amritsar-London-Amritsar route in December, Bombay-Shanghai-San Francisco and Bangalore-Brussels sectors in January as part of its network rationalisation exercise.

“These were the highest loss-making routes. This will, therefore, help us reduce losses further in the next few quarters,” Jet Airways CEO Wolfgang Prock-Schaeur told investors.

Commenting on the fleet rationalisation programme undertaken by the company for the ongoing quarter, he said, “We will lease out another Boeing 777 aircraft, this is aircraft number three (third to be leased out) to Turkish Airlines. Starting April, the plans are to lease out four more Boeing 777s.

“In addition, we will be phasing out our three Boeing 737 classic aircrafts, whose leases expire in Q4 of FY 2009, and not replace them.” In December, Jet had leased out two Airbus A330 aircrafts to Gulf Air and another two Boeing 777s on wet lease to Turkish Airlines.

The carrier had recently announced plans to give two Airbus A 330-200 aircraft to Oman Air on wet lease for a period of six months, with effect from May, under its route rationalisation and cost-cutting exercise. Prock-Schaeur also said the carrier has “rightsized its capacity on the North American routes for which it will only use Airbus A330 planes”.

In its third quarter results, Jet had said its international routes had incurred a loss of Rs 119.1 crore in the quarter ended December 31, 2008, against a loss of Rs 115.9 crore in the same period last financial year.

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Meanwhile, the airline today entered into a code-sharing pact with Malaysian Airlines (MAS) enabling passengers to book tickets on each other’s flights between here and different destinations in India from next month.

Jet Airways Chairman Naresh Goyal said the carrier, which currently only flies the Kuala Lumpur-Chennai route, hopes to expand its network in the region and aims to make Kuala Lumpur its South-east Asian hub in the longer run. Under the pact, Jet Airways will avail code share on MAS flights operating between Kuala Lumpur and Mumbai, New Delhi, Bangalore and Hyderabad.

This would help customers enjoy a wider choice of flights and convenient connections in Malaysia and India, Goyal said, while adding that Jet Airways had cut capacity and leased out its larger planes to cut operational costs.

MAS Managing Director Idris Jala said the arrangement with Jet will allow MAS to capture untapped traffic from secondary points in India through the five Indian gateways

The carrier is expecting to capture about 10 per cent of untapped traffic potential from India to Kuala Lumpur and beyond. The value of the traffic potential is between ten million ringgit and 12 million ringgit (Rs 163.75 million) annually.

Commenting on fares, Goyal said Jet has reduced them following a sharp drop in jet fuel prices but high domestic taxes in India remained an obstacle.

Malaysia Airlines and Jet Airways currently have an inter-line agreement for domestic points across India and Malaysia.

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First Published: Feb 19 2009 | 12:34 AM IST

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