Jet Airways passes on fuel cost burden to passengers

Our Bureau Mumbai | Updated on November 12, 2017 Published on May 20, 2011

In a bid to pass on the rising fuel cost burden onto the customers, Jet Airways has made it 20 per cent costlier for passengers to fly on the airline.

The largest domestic private airline has increased fuel surcharge resulting in 20 per cent costlier ticket prices since May 5.

“We will see how long the increase holds. At the moment, it is going steady, there has been no drop in air travel demand and other airlines are also increasing their fares,” said Mr Sudheer Raghavan, Chief Operating Officer, Jet Airways Ltd, in an investor call.

He added that the hike will increase yield by 20 per cent from what it was in April and 8-9 per cent from the yield in the fourth quarter of the 2010-11 fiscal.

Seat factor clocked by the airline at the moment is 78 per cent, higher than the 65 per cent in April.

Fleet changes planned

The airline is also planning to sell or lease some of 21 Boeing 737s in its fleet.

“We have had proposals for all the 21 aircraft in our fleet. We will sell or lease some of the 737s but we won't let go of all of them,” said Mr M. Shivakumar, Senior Vice-President – Finance, Jet Airways Ltd.

It will also get back all four of the wide-bodied Boeing 777 it had leased to Turkish Airlines in the next fiscal. Two of these will be leased to Thai Airways while the other two will be deployed on its own international operations.

Its new A330 operations will begin on the Manila and Gulf routes once the 777s are returned by Turkish Airlines. Apart from the aircraft it gets back, Jet Airways will also lease six new Boeing 737s.

Cash Coming In

Jet Airways, which has a debt of Rs 13,680 crore, could get $8-9 million (around Rs 36 crore) for every 737. The airline also expects to rake in Rs 350 crore ($81 million) in another two weeks by completing the sale of the land it has in the Bandra Kurla Complex in Mumbai, said Mr Shivakumar.

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Published on May 20, 2011
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