Airline will look at selling planes, and restructuring debt to return to black by 2017
Jet Airways, India's No.2 airline by market share, will look at selling planes and restructuring its debts in its quest to turn profitable in the next three years.
The airline, which suffered a loss of Rs 4,130 crore in 2013-14, said it was planning a major overhaul of its fleet and products.
"We plan to reduce losses in 2015, consolidate in 2016 and turn profitable in 2017... We are already on track as our international business has turned profitable. We now have to take our business forward," Jet's CEO designate Cramer Ball told reporters. Ball is yet to get necessary clearances to take over his position.
Like all but one of India's major airlines, Jet, in which Gulf carrier Etihad recently bought a 24% stake, is losing money fast, beset by high costs, low fares and cut-throat competition in the domestic market.
The press conference was the first jointly addressed by Jet chairman Naresh Goyal and Etihad President and CEO James Hogan.
Both Hogan and Goyal focused on Jet-Etihad partnership, saying it would mark Jet's progressive expansion to North and South Americas, Europe and Africa and lowering of operational costs due to combining of their fleet and routes of the two airlines, among other things.
The Etihad tie-up will allow Jet to increase international operations in Europe, China, Australia and Southeast Asia.
It will allow Etihad to fly on domestic routes from Jet hubs in Mumbai, Delhi, Chennai. Bangalore to regional centres in Ahmedabad, Amritsar, Goa, Hyderabad, Jaipur, Kochi, Kolkata, Lucknow, Mangalore, Patna and Vadodara. Flights for Goa, Pune and Ahmedabad will be added by the end of this year.
James Hogan, CEO of Etihad, said, "We are here to stay and do business. We do not just want to cater to the major Indian destinations, but also to smaller cities that have largely remained unconnected and underserved."
The tie-up between the two airlines will also allow travellers to get US clearance at Dubai airport.
Jet is eyeing a big opportunity in cargo, too. "We are looking at cargo as a major opportunity. New cargo routes to New York, Paris via Dubai will be started soon," said Cramer Ball, CEO of Jet Airways
Terming the Indian aviation market as "fiercely competitive", Ball said the next 12 months would see major changes being implemented to enhance Jet's domestic and international operations.
Goyal said, "We are in the process of finalising our new products, restructuring our financial balance sheet, working with banks and making payments to our creditors."
On whether restructuring of Jet fleet was also on the anvil and would its ATR turboprop fleet be transferred to its low-cost subsidiary JetLite, he said, "We are looking at it. We may sell our surplus aircraft or return them to lessors. We finding out what is the most economical way to go forward. We will be announcing all this soon."
—With agencies
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