Jet Airways’ last-mile hitch in the takeoff its Mumbai-San Francisco flight via Shanghai will cost it Rs 6 crore ($1.5 million) per month.
To operate Mumbai-San Francisco flight by mid-June, not on May 5
BANGALORE: Jet Airways’ last-mile hitch in the takeoff its Mumbai-San Francisco flight via Shanghai will cost it Rs 6 crore ($1.5 million) per month.
The full service airline has already taken the delivery of Boeing 777-200-ER (extended range), which it is going to deploy for flights to US west coast.
However, since the airline will not be able to operate the Mumbai-San Francisco flight from May 5, the plane will be on the ground for over a month.
“It (the aircraft) is waiting to be deployed. As we are planning to start the services between Mumbai and San Francisco by mid-June, we are not utilising it on any other route. It will remain grounded until then,” said Jet Airways CEO Wolfgang Prock-Schauer.
He estimated that the cost due to the delay could roughly be in the region of Rs 6 crore per month.
This includes capital charge, interest, depreciation and others. Prock-Shauer said that Jet was forced to delay the launch of the flight as the paperwork and regulatory process were not yet completed.
“Even though we have the in-principal approval for starting flights to the US west coast via China (Shanghai), a whole lot of lengthy paperwork and formality have to be fulfilled. So, we thought it would be wiser to start from mid-June,” said Prock-Shauer.
This cost overrun (due to the postponement of flight), even though small, analysts say will marginally impact Jet’s international business, where it is competing with already established players by giving high-end services at competitive fares.
“It is a small cost, but since Jet is already squeezed for capital, it is likely to feel the pinch,” said an analyst with a domestic broking house.
Naresh Goyal’s Jet Airways currently operates flights to New York and has code sharing pact with American Airlines for connectivity to US cities such as Baltimore, Boston, Cleveland, Dallas (Fort Worth), Raleigh-Durham and Washington (Reagan).
With the launch of its Mumbai-San Francisco service, Jet is looking at tapping business travellers out of India and US’ Silicon Valley.
Vijay Mallya’s Deccan Aviation Ltd, which is all set to launch its international operations later this year, is also eyeing IT travellers between the two countries. The airline has announced that it will launch its international service with a non-stop Bangalore-San Francisco flight.
p_sharma@dnaindia.net
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