Faced with heavy losses, budget carrier JetLite has shelved plans to fly abroad. It will also stop 20 of its 131 daily flights within the country and ground three of its 18-strong fleet of Boeing 737s.
"We do not want to start operations to West Asia or any other foreign destination right now," JetLite CEO Rajeev Gupta said, adding: "Any international route launched now will take at least three months to stabilise. We do not have the capacity to bear these losses with the current downturn."
A fully-owned subsidiary of the Naresh Goyal-controlled Jet Airways, JetLite made a loss of about Rs 42 crore ($10 million) in June alone.
This comes close on the heels of Kingfisher Airlines' rethink on the launch of its international services and the Wadias-owned GoAir's decision to trim its workforce by ten per cent.
All Indian airlines are bleeding under the impact of the economic slowdown and the rise in jet fuel prices. In 2008-09, the industry is projected to double its losses to Rs 8,000 crore.
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JetLite had drawn up plans to fly to West Asia and had sought flying rights to destinations like Doha, Qatar, Muscat, Abu Dhabi and Sharjah with a clear intent to capture the lucrative market from state-owned Air India Express. These services were slated to take off in August.
Since then, West Asian carriers like Air Arabia and Al Jazeera have dropped fares on the sector. This has made matters worse for JetLite. "There is a market for full service carriers in West Asia but so far as value-based carriers like JetLite are concerned, we do not see a profitable market right now for us to penetrate," Gupta added.
Meanwhile, JetLite is negotiating with airport operators at Mumbai and Delhi to assess the feasibility of retaining the prime slots it will lose after cutting flights. According to policy norms, any airline that pulls out of a slot from an airport loses the right over that slot. Jet Airways might move in to take these prime slots and get JetLite out of trouble for the time being.