The Hindu Business Line : With airline industry battling losses, it’s not the right time to lower fares: Jet

Destination Dubai: Mr Wolfgang Prock-Schauer, CEO, Jet Airways, with Mr Abdulla Ebrahim A. Alzoy Al Shehhi, Ambassador of UAE in India, at the inauguration of the Delhi-Dubai flight at the Indira Gandhi International airport in the Capital on Saturday.

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Mumbai/New Delhi, Aug. 23 Domestic air travel could become more expensive despite a fall in the global prices of crude. On Saturday, the Chief Executive Officer, Jet Airways, Mr Wolfgang Prock-Schauer, said that with the airline industry reporting huge losses, it might not be the correct time to lower fares just yet.

“The industry will have to see how oil is priced in rupee terms and also look closely at the effect of Indian currency vis-À-vis other international currencies. Generally, I can say that there is discrepancy in the price that oil companies ask for and what they should be asking.

“Therefore, the room to manoeuvre as regards pricing of air tickets is limited. If there is a marginal decrease of say up to 5 per cent in prices of aviation turbine fuel, the industry is unlikely to be able to pass this on to the customer. An increase in fares is possible if fuel does not come down significantly,” Mr Prock-Shauer told newspersons at a function to launch daily flights between Delhi and Dubai.

In Mumbai, the Chief Commercial Officer, Mr Sudheer Raghavan, said that Jet Airways will raise fares wherever there are very high load factors and where fares were not as high.

Speaking on the airline international expansion plans, the CEO said that Jet Airways plans to launch a daily flight between Thiruvananthapuram and Muscat shortly, apart from starting a daily flight between Bangalore and Brussels.

Curtailing flights

The airline will, however, temporarily look to withdraw some services to the Gulf region because of the Ramadan festival and curtail services on the Mumbai-Shanghai-San Francisco route to five times a week from a daily flight till November this year. In the domestic sector, the airline has announced a 10-15 per cent temporary reduction in flights being operated by both Jet Airways and its 100 per cent subsidiary, JetLite.

Asked whether the airline has deferred or cancelled delivery of any aircraft, Mr Prock-Shauer said Jet was in talks with Boeing for deferring delivery of two Boeing 777 aircraft.

“The aircraft are to come in 2009 and we would like to take delivery in 2010. Discussions are on and no final decision has yet been taken. But there has been no cancellation or deferment in the other aircraft,” he said.

The Chief Commercial Officer added that the airline is targeting breakeven by the end of the current financial year. “We will look at reducing our costs and improving revenue,” he said.

Commenting on how the airline plans to meet its cash needs, he said that it is evaluating all options. On the rights issue, Mr Raghavan said that they would wait for favourable market conditions.

He added that the airline’s studies for a maintenance repair and overhaul operation are nearing completion and the airline is likely to make some announcement in the next two to three months.

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