Instead of rushing to make expensive aircraft purchases, carrier to opt for leasing, code-sharing agreements
Unlike its rivals which are placing huge aircraft orders, full-service carrier Jet Airways claims that it does not want to rush into expensive asset purchase game and would rather develop the market by way of leasing aircraft, code-shares and strategic partnership.
The airline, at present, has a fleet of 114 aircraft, which includes a mix of wide-body planes like Airbus A330s and Boeing 777s and narrow-body 737s and ATRs.
Besides, Jet Airways has 75 Boeing 737s Max on order which is due for delivery in 2018. Also, the airline is said to have deferred the induction of Boeing 787 aircraft which was scheduled to get delivered by the end of next year.
However, Gaurang Shetty, whole-time director of Jet Airways, said that the strategy has worked for the airline as it has the second-largest network from India.
National carrier Air India has the largest network.
Jet Airways now has five gateways through which it operates, apart from core hubs in Mumbai and Delhi.
As per the statistics available with the airline, its code-share traffic has surged from 650,000 passengers in FY14 to 1.22 million in FY15.
Further, during FY16, the traffic touched 2.1 million passengers. Also, interline volumes have grown 121 % since FY2013-14.
“Over 80 % of interline sales are on code share partner airlines,” said Shetty. “Every 1 in 10 passengers on our flight connects from or to a partner airline,” he added.
“It’s not that only if you place large plane orders that you are expanding. We keep scanning for all kind of opportunities like leasing of planes to increase our capacity. End of the day, it’s the bottomline which matters,” he continued.
However, Shetty refused to comment when asked whether the airline has cancelled any of the aircraft orders already in place.
Jet Airways’s rivals, on the other hand, have not only placed the large orders but also want the aircraft to be inducted in reasonable number over a period of a decade so as to capture the market share.
For example, low-frills airline IndiGo expects to add 18 aircraft to its present fleet of 118 by the end of this fiscal year. The airline has placed an order for 430 fuel efficient A320neo aircraft.
Similarly, on GoAir had also doubled its A320neo order when it ordered 72 additional 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.
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