India's leading private carrier Jet Airways today said its aggressive overseas and domestic expansion plans are not linked with the $400-million qualified institutional placement (QIP) issue that provides cushion for buying more aircraft.
"Our expansion plan is not linked with the QIP issue. We are leasing and we are not planning to buy any more aircraft from funds raised via QIP, because we don't want our balance sheet to weaken," Jet Airways Chairman Naresh Goyal told reporters here.
He added that QIP will be used to "repay some of our debt so that our interest payment comes down to improve the balance sheet".
He made it clear that Jet's aggressive fleet and route expansion plans were not linked with the QIP issue.
On relaxation of the foreign direct investment limit he said: "I don't see any problem in QIP... Policy is very clear. We are not a foreign company. There is no question of bringing down FDI. FIPB has asked for clarification and we will take some time to reply".
Goyal, who is in Italy as part of FICCI's CEOs delegation led by Commerce and Industry Minister Anand Sharma, is exploring opportunities for expansion in the European market.
He said Jet Airways was looking to expand in more European cities besides Shanghai, Beijing and Manila in the coming years.
"We will use Delhi and Mumbai as hubs to take traffic beyond India. Nobody has done this ever".
The premier private carrier will start Mumbai to Rome direct flights next year.
Jet Airways is taking ten more Airbus A-330s and some of them will be delivered next year. A-300 and A-330 aircraft have more seats and some of them will fly to Europe, Goyal added.
To questions, he said "we are also re-branding low-cost carrier JetLite. We are looking to make it like Jet Konnect because it will improve productivity and bring down confusion."
According to a senior Industry Ministry official, Foreign Investment Promotion Board (FIPB) has rejected the airline's request for a relaxation of the foreign direct investment (FDI) limit of 49 per cent to raise $400 million via QIP.
The Civil Aviation Ministry had last year put conditions to Jet's fund raising plan and had asked it to bring down its FDI level within the sectoral cap of 49 per cent in three years after QIP and also said the airline's control should not be in foreign hands.
The government had sought a series of clarifications on Jet's QIP proposal in October 2010.
As of June last, Jet's total debt in Indian and foreign currency together was around Rs 13,500 crore.
A few months ago, the Reserve Bank of India had allowed banks to restructure airline debts.
Indian carriers had accumulated huge debts between 2006 and 2008, when the demand for air travel had dipped and stiff competition forced carriers to sell way below cost.
