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Bijoy Ghosh

Direct Newark flight: The Union Finance Minister, Mr P. Chidambaram, and the Jet Airways Chairman, Mr Naresh Goyal, in Chennai on Sunday at the launch of Jet Airways’ Chennai-Brussels-Newark flight. Mr Goyal said Jet’s international operations would nourish the airline’s domestic business by bringing in passengers to travel within India.

Our Bureau

Chennai, Oct 28 Jet Airways expects international operations to account for half of its turnover by 2010, the company’s Chairman, Mr Naresh Goyal, told Business Line today. (International operations contributed a fourth to the company’s first quarter turnover of Rs 1,983 crore.)

International operations, he said, would nourish the airline’s domestic business, by bringing in passengers to travel within India.

Mr Goyal, who spoke to Business Line on the day of Jet Airways’ inaugural flight between Chennai and Newark, US, via Brussels, said that the airline had already become popular on the international routes it operates now. “We have a 23 per cent share of the India-UK segment.” Mr Goyal said that the company planned to increase its capacity by 15 per cent in the next three years. Jet has announced it would increase its fleet strength from 62 aircraft to 110 by 2011. The airline is also in talks with Embraer and Bombardier for purchase of aircraft, Mr Goyal said.

It has been said that the company’s aircraft acquisition programme would cost about $2.5 billion. The company had proposed to come out with a rights issue to raise $400 million, but had deferred it. (This is because the main shareholder of Jet, Tail Winds Ltd, which is wholly-owned by Mr Goyal, would need to raise $320 million to subscribe to Jet’s rights issue to keep up its 80 per cent stake in the company. This would mean raising loans from international institutions, which, given the current liquidity crunch in the US following the sub prime crisis, would be difficult.)

Asked about this, Mr Goyal said that the rights issue could come up in February.

Jet Airways, which has created an international hub at Brussels, is in talks with SN Brussels Airlines for code sharing agreement. The alliance with SN, Mr Goyal said, would bring Jet a million more passengers. Asked if Jet would takeover SN, he said that for the present, “I see no need to take it over.”

Mr Goyal was gung-ho about the Brussels hub, noting that it was for the first time in the history of aviation that an airline had created a hub in a third country. He said that Jet found it “much cheaper” to operate out of Brussels than Mumbai.

JetLite India Ltd, (formerly, Sahara Airlines), which is wholly-owned by Jet Airways, will break even next year, Mr Goyal said.

Stressing that JetLite was not a low cost carrier (“there is no such thing as a low cost carrier in India”), Mr Goyal said that there were many synergies between the operations of JetLite and Jet. For example, both airlines have similar types of aircraft in their fleet. As such, it has been possible to avoid duplication of inventory of spares. Also, now that the two airlines are under the same management, airport staff has been rationalised.

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