Jet Airways has divulged plans of a $400 million rights issue for its expansion plans and start a full-fledged cargo service by this year-end.
MUMBAI: Jet Airways on Sunday said it mulls $400 million rights issue for its expansion plans and start full-fledged dedicated cargo service by this year-end.
Jet Airways Chairman Naresh Goyal told reporters that, "we are looking at a $400 million rights issue, which is expected to be completed in four months and the money would be utilised for funding aircraft acquisition."
Goyal said that the airlines would also honour the commitment made by Air Sahara to acquire 10 Boeing aircraft. Jet had recently acquired Air Sahara for Rs 1,450 crore.
"Where are the planes? There is scarcity of planes. We are going to exercise the options," Goyal told reporters after showcasing two new aircraft, Boeing 777-300Er and Airbus 330-200 that the largest domestic carrier has acquired for its international operations.
Elaborating on the proposal to launch a dedicated cargo service, Goyal said that the company has already appointed a US-based NRI from American Airlines to oversee the project.
"We hope to launch the full-fledged cargo service by the year-end. Currently, six per cent of our revenue comes from cargo operations and we hope to make it to 10 per cent by the year end," Goyal said.
Goyal said it would need $ 50 million to bring Sahara up to mark and added that Jet Airways has already bagged approval from the Government to use 'Jetlite' brand and the first flight in that brand would take off within two-months.
He claimed that the operational cost to run Jetlite would be less as the ground and other staff would be same as that of Jet Airways.
Goyal made it clear that the newly-acquired airlines will not sell tickets at below costs. "We will not undersell tickets," he said.
Giving the rationale for choosing Brussels as its international hub, Goyal said there was no problem of slots in the Belgium capital unlike in other European airports.
Jet Airways announced Brussels as its European hub on May 2 to connect different points in the US and Canada. This was announced at a function in Brussels in the presence of Union Civil Aviation Minister and the Prime Minister of Belgium.
Belgium Government has pledged their support by providing necessary assistance, Goyal said.
He also said that Jet aims to handle 12 million passenger traffic this year.
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