Jet Air Plans $15 Million Cargo Unit After Axing Venture Plan

Jet Airways (India) Ltd., the nation's biggest domestic carrier, will invest as much as $15 million in setting up its own air-cargo unit after scrapping plans to form a venture.
The carrier expects to begin flying freighters by the middle of next year, Chief Commercial Officer Sudheer Raghavan said in an interview today in Shanghai. Talks with Deutsche Lufthansa AG, Germany's biggest carrier, about forming a venture ``didn't work out,'' he added without elaboration.
Jet wants to join state-owned Air India in flying freighters as surging fuel prices and cutthroat competition squeeze margins on passenger flights. The country, home to about a sixth of the world's population, has less than 10 all-cargo planes at present, according to Centre for Asia Pacific Aviation.
``That's a miniscule number'' so ``there is space for more cargo carriers,'' said Binit Somaia, the aviation advisory company's Sydney-based director for India and the Middle East. Still, ``it would help to have a partnership with a global operator.''
The airline's cargo unit will be equipped with at least three leased Boeing Co. 737 passenger planes converted into freighters, Raghavan said. The planes will be taken from JetLite, the carrier's low-fare unit. The carrier needs to get permission to transform the planes from the aircraft owners, Raghavan said.
16/06/08 Irene Shen/Bloomberg

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Categories: Cargo Jun 2008, Foreign Jun 2008, Jet Airways Jun 2008