New Delhi: The country’s largest private carrier by fleet size and market share Jet Airways could put additional capacity on short-haul international routes instead of domestic sectors with margins remaining negative in the local market.
“Domestic carriers are selling their tickets below the cost. In spite of air traffic growing 15% y-o-y the yield is low. If this continues we could put our aircraft (B737s) on international routes in summer,” Jet Airways COO Nikos Kardassis said.
The international operation offers Indian carriers better margins as they have to pay 30% less for jet fuel, which contributes nearly one-third to their total operating cost. Jet Airways earns 58% of its revenue from its international operations.
Nikos said that domestic airlines are currently selling tickets 15-20% below the cost with some airlines charging R3,500 for certain flights on the Delhi-Mumbai route, nearly half the price a full-service carrier needs to charge to remain profitable.
15/10/11 Nirbhay Kumar/Financial Express
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