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Airlines

Jet Airways Plans to Increase Focus on International Passengers

Strategic Insights

— 2 min read

Indian carrier Jet Airways, the country's largest airline by passenger traffic, is gearing up to take on foreign rivals with a focus on international passengers. Jet chairman Naresh Goyal announced plans to expand the airline's fleet and introduce long-haul aircraft to tap into the lucrative international market. With foreign airlines dominating the international traffic to and from India, accounting for 65% of the market share, Jet hopes to eat into their share.

Goyal emphasized the need to position Jet Airways as a reputable Indian carrier with a strong brand image, reliability, and efficient hub operations between Delhi and Mumbai. He highlighted the airline's existing routes, including London to Bangkok, and expressed interest in expanding to other European cities, such as Paris, Rome, and Amsterdam, as well as in China, specifically Shanghai and Beijing. Jet's fleet will be expanded over the next three years, with a focus on long-haul aircraft, including the Boeing 737 and Airbus A330.

Goyal also expressed concerns about allowing foreign airlines to invest in Indian carriers, citing the need to maintain control over the country's aviation industry. Despite the airline's significant debt burden of $3 billion and past losses since 2006-07, Goyal remains optimistic about prospects, expecting a growth rate of 11-12% in the domestic market and 12-15% internationally.

Key Takeaways:

  • Jet Airways plans to increase its focus on international passengers to counter competition from foreign airlines.
  • The airline aims to expand its fleet over the next three years with a focus on long-haul aircraft, including Boeing 737 and Airbus A330.
  • Jet Airways will position itself as a reputable Indian carrier with a strong brand image, reliability, and efficient hub operations between Delhi and Mumbai.
  • The airline aims to tap into international markets in Europe, such as Paris, Rome, and Amsterdam, as well as in Asia, specifically China, and India can participate in these traffic routes.
  • Jet Airways has a debt of $3 billion and plans to raise funds through a qualified institutional placement of shares (QIP) or other options, but has not yet decided on the dilution.
  • An analyst from The Hongkong and Shanghai Banking Corporation Ltd expressed concerns about the airline's debt and ability to raise funds through QIP and other options.

Statistics:

  • Foreign airlines dominate international traffic to and from India, accounting for 65% of the market share.
  • Jet Airways' fleet will be expanded over the next three years with a focus on long-haul aircraft.
  • The airline will order Boeing 737s and medium-haul Airbus A330 aircraft, with an A330 sticker price of over $200 million.
  • Jet Airways' growth rate is expected to be 11-12% in the domestic market and 12-15% internationally.
  • The airline's debt stands at $3 billion.

Sources:

  • Tarun Shukla, "Jet Airways Plans to Increase Focus on International Passengers", The Mint, June 09
  • "Jet Airways to expand fleet, tap into international market", The Mint, October 22
  • "Jet Airways plans to grow at 11-12% a year in domestic market, 12-15% internationally", The Mint, June 08
  • "Large repayments seem a remote possibility at this stage, in our opinion", Mark Webb, analyst, The Hongkong and Shanghai Banking Corporation Ltd, June 8

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