Private carrier Jet Airways will take back all six wide-body Boeing aircraft leased out to its investment partner Etihad Airways in the next six months and deploy them on some of its core routes including to the Gulf.
The six B777-300 ER aircraft are expected to be put into service from August and some of them are likely to be used in the domestic sector as well, Jet Airways Chief Financial Officer (CFO) and acting Chief Executive Amit Agarwal said during a post-earnings analysts' call recently.
"Our wide body (Boeing 777) aircraft currently on lease to partner airline Etihad will be taken back and operationalised from August. Based on the market condition, our plan is to upgrade some of the existing A330 routes with B-777," Agarwal said.
"We will be careful and cautiously deploy these aircraft in the domestic market," he said.
These ultra long-haul operation planes had been wet-leased to Etihad, which holds 24 per cent stake in the Naresh Goyal-owned private airline.
Wet lease is an arrangement in which the lessor provides an aircraft along with the cockpit and cabin crew and pays for its maintenance and insurance. The company which wet leases the plane pays by the hours it is operated. In dry lease, only the aircraft is leased out.
The Mumbai-based full service airline, along with its subsidiary JetLite, has a total of 116 aircraft, with 92 of them being on operating lease and rest 24 owned by it.
"This (replacement of Airbus A330 with B 777) will subsequently result in additional capacity in our core market India and Gulf," Agarwal said.
Jet Airways, the second largest domestic carrier by market share, also plans to deploy these long-haul planes to destinations like Amsterdam, Paris and Toronto by replacing the existing wide-body Airbus A330s, a Jet official had said early last month.
Amsterdam became the airline's new overseas gateway for international operations to Europe and beyond from late March, replacing Brussels.
Staying profitable for the fourth straight quarter, Jet Airways posted a net profit of Rs 426 crore in January-March, primarily aided by lower fuel expenses and higher passenger numbers.
In the financial year ending March 2016, the airline posted its first annual profit after eight years, recording a net profit of Rs 1,212 crore. In the corresponding period, it had a net loss of Rs 2,097 crore.
But this comes amidst steeply falling market share in
the domestic sector. In the second quarter its domestic market share plunged by over 400 bps to 14.4 per cent from 19.5 per cent in the first quarter.
When asked about this, Shetty said, the focus is on profitable growth and not just ferrying passengers from one point to another. But he parried a query on whether all his 46 domestic routes are profitable.
He also refused to join the huge aircraft order spree by his rivals saying being Jet it does not want to rush into an expensive asset purchase game but will rather develop market by way of leasing aircraft, code-shares and strategic partnerships.
Jet at present has a fleet of 114 aircraft which includes a mix of wide and narrow bodies- the wide bodies include the Airbus A330s and Boeing 777s, while narrow bodies are the Boeing 737s and ATRs.
It has 75 Boeing 737s Max on order which are due for delivery in 2018.
This comes amidst report that the airline is said to have deferred the induction of 787s which was scheduled to get delivered by the end of next year.
"It is not that only if you place large orders that you are expanding. We keep scanning for all kind of opportunities like leasing of planes to increase our capacity. At the end of the day, its the bottom-line which matters," Shetty said.
But Shetty, refused to comment whether the airline has cancelled any of the aircraft orders already in place.
Jet's rivals, on the other hand, have not only placed large orders but also want it inducted in reasonable number over the next decade, to capture the market share.
For example, low-frills Indigo, which is the market leader with close to 43 per cent market share expects to add 18 more aircraft to its present fleet of 118 by March. The airline has placed an order for 430 fuel efficient A320 Neos.
Similarly, smaller rival Goair, has also doubled its A320 Neo orders by placing an additional 72 aircraft as part of its expansion plan. Goair has plans to start international operations by early next year when it gets a total of 20 aircraft in its fleet.
Meanwhile, Jet is also planning to add more red-eye flights to meet the growing demand of incoming international passengers who arrive during the night.
As part of its international expansion, Jet will add 11 destinations between India and Abu Dhabi and 18 destinations to Europe going forward.
