Jet set to expand fleet to capture European market

Jet Airways, India’s largest private carrier, will place orders for more Airbus A330s and Boeing 737s as it works to transform New Delhi and Mumbai airports into hubs that will connect European destinations with those in South and Southeast Asia.

The airline is looking at new destinations in Continental Europe, including Paris, Rome, Amsterdam and cities in Germany, and has already applied to government authorities for traffic rights. “We are seeing where the Gulf carriers are carrying the traffic from Europe to India and we want to use India, Delhi and Mumbai (airports), as our hubs to carry traffic to Bangladesh, Sri Lanka, Nepal and (destinations in) Southeast Asia such as Bangkok, Malaysia, Philippines. We are looking at introducing (services) again to Shanghai, we are studying Beijing,” Jet Airways chairman Naresh Goyal said.

 

While the carrier, which currently operates a total fleet of 116 aircraft, will look to add capacity, Goyal did not give any specifics other than that a clutch of A330s and 737s would be delivered in the next two-three years.

Jet Airways already flies to 24 international destinations, including London, Milan and Brussels in Europe. The Belgian capital is also the airlines’ hub for flights in and out of the continent.

“We are looking at some of the European expansion and we have applied for some of the traffic rights to the civil aviation ministry. I hope those clearances will come, so that we as an Indian carrier can play a further important role for the convenience of customers and get India’s market share (of international traffic) to what we deserve,” he said.

India is among the fastest growing aviation markets in the world, with both domestic and international passenger segments exhibiting strong growth. The former segment, according to the International Air Transport Association (IATA), expanded by 25.6 per cent year-on-year in April, the highest growth globally.

Moreover, IATA expects Asia-Pacific to be the most profitable region for the airline industry this year, contributing half of the total $4 billion of profits that the sector is likely to rake in globally. That apart, this is the only region where demand growth is slated to outstrip capacity addition.

Despite such bullish outlook, Goyal insists that Jet Airways will not “expand just like for the fun of expanding.” “We are always very concerned about the investors. So, it is better to play safe than to promise too much and then you don’t deliver to the shareholders. The GDP (of India) is about 8.5-9 per cent, so we believe that we should plan our expansion about 11-12 per cent per annum for domestic and the international traffic between 12-15 per cent,” he said.

The carrier posted a loss of Rs 124.5 crore for the fourth quarter of last financial year, while registering standalone yearly profit of Rs 9.6 crore.