Jet set for US landing

Flights start in April; Sahara looks at winter launch.

Jet Airways will be the first private Indian carrier to fly to the US. The government today gave permission to the airline to start three flights a week to New York via Brussels from April.

"This follows the air services agreement between India and the US recently," said a civil aviation ministry official.

It is also expected that the government will allocate more flights on the US route when it draws up its 2005 winter schedule.

This move is a major boost for the Indian private carrier as the US is one of the largest markets for carriers and will give Jet Airways an early-mover advantage over other Indian private carriers like Air Sahara on this route.

Air Sahara, which is also eligible to start services to the US, has not sought permission to start flights. "We did not seek permission this season. We are looking at the next winter schedule," said an executive at Air Sahara.

The government's decision is part of its plans to open up international services to Indian private carriers. It has already allowed Jet Airways to start daily services to Singapore, Kuala Lumpur and London. Besides, the government has also allowed Air Sahara to start daily services to Singapore and Kuala Lumpur and three flights a week to London.

The airline industry is of the view that once other private airlines are also allowed to start flights to the US, the capacity on the route will at least double. It may be recalled the recent liberalised air-services agreement between India and UK has lead to capacity on the routes increasing to 80 flights per week from 32 flights per week.

The government is of the view that that the time has come to revise the old agreement with the US according to the needs of the hour and in keeping with the relationship between the us and India. Sources said that the talks would be held with the US aimed at provide more access to carriers from two countries to each other.

This means, in addition to more flights, more cities would be opened to airlines from two countries. Currently Indian carriers are allowed to fly to four US cities of New York, Newark, Los Angeles and San Francisco.

The air-services between the two countries are currently governed by and agreement entered in 1956. This agreement, Civil Aviation ministry officials said places restrictions on the number of airlines flying between the two countries, cities that can be served, the frequency of service and pricing.

IPO subscribed 4.2 times on Day 1

Jet Airways' initial public offer (IPO) was fully subscribed within minutes of opening today. At the end of the day, the offer was subscribed 4.24 times, according to data posted on the Bombay Stock Exchange.

Merchant banking sources close to the offer said the offer of 17.267 million shares received bids for 19.8 million shares in the first 25 minutes. The day closed with bids for as many as 73.24 million shares, translating into a subscription of 4.24 times.

The shares are being offered through the book built route in the price band of Rs 950-1,125 per share.

Data available from stock exchanges suggest that bids for 64.78 million shares, representing 88 per cent of the offer, were submitted at Rs 1,125 per share, and bids for 7.44 million shares (10.15 per cent of the offer) were received at the lower level of the band at Rs 950.

Foreign institutional investors (Fis) bid for 51.21 million shares on the first day, translating into 69.93 per cent of the block of shares reserved for them. Mutual funds bid for 21.01 million shares, making up 28.69 per cent of the offer.

Employees bid for only 120 shares on the first day, against a lot of 12 lakh shares reserved for them.

A merchant banker assocated with the offer said most of the bids were from the qualified institutional bidders, and not many offers were received from retail investors today.

"They (retail investors) will start putting in their applications towards the end of the offer, " he said. The issue will close on February 24.

Flying start

Shares on offer: 17.267 million

Bids received for: 73.24 million shares

Accepted: 19.8 million

Time taken: 25 minutes

Price band: Rs 950-1,125

FIIs bid for: 51.21 million shares or 70%

Employees bid for: 120 shares