Jet threat to Air India in the Gulf

Jet Airways' first flight to the Gulf (initially to Bahrain and Kuwait followed by Muscat and Doha at a later stage) is set to take off tomorrow, making it the first private sector player in the highly lucrative sector.
Currently Air India and its low-cost subsidiary Air India Express service sectors like Dubai, Doha, Muscat, Bahrain and Kuwait along with a plethora of foreign carriers.
P K Sinha, vice-president, international relations and industry affairs, Jet Airways, says, "All the carriers will have to part with some market share. To my mind Air India is in a better position to retain market share as compared to others as it is targeting the lower end of the market with AI Express. It is price sensitive market, particularly the Kerala-Gulf sector."
On the other hand, an analyst with a foreign brokerage who did not want to be named believes Air India could be affected more than its low-cost sibling.
Ankur Bhatia, executive director, Bird Group, concurs. "It will affect Air India, especially because a majority of Air India's profits are from the Gulf sectors." He also believes that not having Dubai in its network is a downer for Jet. In what is primarily a budget market, most of the premium traffic which Jet would be targeting heads to Dubai.
Competitors like Air India seem unperturbed. "We have been operating in these sectors for years and have been facing intense competition from foreign carriers..," says Jitender Bhargava, ED, Air India.
04/01/08 Nirmal John/DNA Money

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Categories: Foreign Jan 2008, Jet Airways Jan 2008, New Jan 2007