India and China signed a bilateral air service pact on Thursday, clearing the path for Naresh Goyal’s Jet Airways to use Shanghai as its hub for US operations in the APAC region.
Airline to begin flights in 2-3 months
BANGALORE: India and China signed a bilateral air service pact on Thursday, clearing the path for Naresh Goyal’s Jet Airways to use Shanghai as its hub for US operations in the Asia Pacific (APAC) region.
Jet Airways’ plans to launch flights from Mumbai to San Francisco via Shanghai had hit strong headwinds as the Chinese government dithered to grant it permission to establish a hub in the commercial capital of China.
Now that it has been cleared, Jet Airways executive director Saroj K Datta said that the full-service carrier would launch operations from Shanghai in 2-3 months.
“We plan to start flying out of Shanghai at the earliest. Usually, the lead time for launching a flight is 2-3 months,” said Datta.
The airline will use Boeing 777-300 ER to start daily Mumbai-Shanghai-San Francisco flights.
Under the agreement, designated airlines can operate to any three beyond (forward) points with not more than two points in one region.
India has specified the US and Canada as one region, Australia and New Zealand as the second region and Asia as the third region for the beyond points for Indian carriers to operate agreed services.
China has chosen Africa, Middle East (including Gulf area) and Europe as three beyond points for its carriers.
The two countries have agreed that designated Indian air carriers could operate beyond China to San Francisco with more traffic rights. China would be nominating a beyond point in India with more rights later.
The agreement is also expected to benefit state-owned Air India, which operates a Mumbai-Delhi-Bangkok-Shanghai flight four times a week.
Currently, Chinese airlines like Air China, China Eastern Airlines and China Southern Airlines operate 18 services out of India.
Jet was reportedly keen on creating its APAC hub for US services in Shanghai against Hong Kong and Singapore because that would save it 2-3 flying hours.
The airline already has an overseas hub in Brussels (Belgium) and is reportedly considering a second European hub (in Paris, Munich and Milan) for flights to the US.
Analysts said the government move will give a boost to Jet’s plans to expand its international operations.
The legacy carrier has said that, by 2010, close to 50% of its revenues would come from overseas services. This is prompting analysts to press the alarm bell with global economic slowdown looming large.
Anirudha Dutta and Prakhar Sharma in their report dated March 10 say; “with international operations estimated to contribute 43-45% of 2009-10 revenues, Jet’s exposure to global economic slowdown is significant. Accordingly, we have cut our revenue forecast for 2009-10 by 4-7%.”
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}