Tuesday, June 04, 2019

Jet Airways Failure A 'Wake Up Call', Policymakers Must Also Share Blame, Says SpiceJet Chairman Ajay Singh

Seoul: The failure of Jet Airways should be a "wake up call" for the aviation industry and at least part of the blame should be at the doorstep of the policymakers as the cost structure is high, SpiceJet chief Ajay Singh has said.

Low-cost carrier SpiceJet is expanding its operations and is set to take on lease 30 planes that were flown by Jet Airways, which suspended operations in April due to cash crunch. SpiceJet has at least 100 aircraft in its fleet now.
Noting that the grounding of Jet Airways was "very sad", Singh said that internal factors and high costs were among the reasons for its failure. "Jet Airways grounding is something which is very sad and it should be a wake up for all of us in the aviation sector and the policymakers. I think Jet Airways was an iconic brand, and at least part of the blame for its failure has to be at the door step of the policymakers.

"High cost structure which is being imposed on aviation has certainly led to its downfall and of course, internal factors. The fact that Jet had a cost structure which was probably uncompetitive and as airlines came, it became tough to get yield commensurate with cost structure," he told PTI in an interview. Jet Airways operated for nearly 26 years, with an extensive network of domestic and international flights.

Indian aviation sector has high growth potential, but airlines have been flagging concerns about high costs, especially for aviation turbine fuel (ATF) that accounts for over 40 per cent of an airline's operational expenses.
Singh said high taxes on ATF, certain infrastructure charges as well as high import duty on aircraft parts and services are among the factors which make the domestic aviation sector "uncompetitive". "To compete increasingly with global carriers, it is important that we find a cost structure which is competitive with them.
04/06/19 PTI/News18.com

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