Jet plans 10% reduction in domestic flights

New Delhi: Naresh Goyal-owned Jet Airways is all set to reduce domestic capacity by 10% within a month. This will be over and above 20% capacity
pruning the airline has done during November-May, to tackle slowdown in traffic and mounting losses. Jet's net loss touched Rs 961.4 crore in 2008-09.
However, the reduced capacity in domestic routes will be added to the international operations where the airline is making profit. So, some Boeing 737s deployed on the domestic side will be diverted to Gulf and southeast Asia. And, some 737s will be shifted to Jet's new low-cost brand, Konnect.
"In the reduced travel during this slowdown, the domestic aviation industry has 40% over-capacity. Ticket prices are about 30% below the cost recovery level. The industry as a whole has to remedy this situation but we are doing our bit. After cutting 20% domestic capacity from November to May, now we will go in for another 10% cut by June," said a senior official. At present about 40 of the 50 Boeing 737s in Jet's fleet are used on domestic side. In an ongoing route rationalisation that saw smaller planes being deployed on routes as per actual loads, Boeing 737s are now used to service all international sectors except North America, Europe and Mumbai-Singapore. Now more of these planes would be used for international expansion.
"Our EBIDTA growth on international sector is 24% in Q4 of 2008-09, a figure that was negative on first two quarters of last fiscal and 12% in Q3. The improved result, though the overall condition is still challenging, is substantially due to international operations doing better. We are almost done with our international long-haul restructuring and there will be gradual expansion here," Jet CEO Wolfgang Prock-Schaeur said. Better showing on international front helped Jet post a profit of Rs 53 crore in Q4 of 2008-09.
28/05/09 Saurabh Sinha/Times of India

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Categories: Jet Airways May 2009