Despite headwinds, it’s business as usual for Jet Airways

Unfazed by poor financial health, a survey by the Income Tax Department and the negative media coverage that it has been getting, it is business as usual at Jet Airways, which is going ahead with its international plans.

Come November 5, the airline is going to launch a five-times-a-week, non-stop, service linking Mumbai and Manchester. This direct connection to a second city in the UK comes close to 15 years after the airline launched direct flights between Mumbai and London. The Mumbai-Manchester flight will also be the first non-stop connection between India and North UK.

London is the only other city in the UK to which Jet operates at the moment although it does connect to other cities in Europe and America from India.

Air India is the only other Indian airline which operates non-stop services not only to London but also has a daily service from Delhi to Birmingham and also connects Amritsar to Birmingham. IndiGo, the low-cost airline based out of Delhi, is also said to be considering launching a flight to London but it is yet to make its plans for this flight public.

‘Downturn is part of cycle’

Jet’s flight to Manchester does raise a few questions. The airline reported a huge loss in August and had net loss of ₹1,323 crore in the first quarter as compared to a profit of ₹53 crore previously this year. The financial stress that the company is under can also be gauged from the fact that it has asked its top executives to take salary cuts and it has told the Directorate General of Civil Aviation that it could consider cutting back on flights in December. So, does it make business sense to launch a virgin international route at this time?

Gilbert George, Vice-President, Europe and Americas, thinks it does, as he is clear that what the company is facing right now is a normal business cycle.

“Manchester is part of the whole system of network building (and) strengthening our base in Europe. We do not want to get away from the flight path that we have designed for ourselves, which is talking about the MAXs (Boeing 737 MAX) coming in, talking about streamlining some of the destinations that we fly to in India or international,” George points out. The airline has ordered 225 MAX which, apart from fuel saving, will also help the airline fly longer distances from India as compared to its existing Boeing 737 fleet.

Jet is looking at Manchester not only for origin and destination connections but also beyond connections as it feels that this new route will give it an opportunity to connect to cities in the US from Manchester through its partners like Virgin and Delta Air Lines.

The launch of this new service will also provide connectivity to several domestic destinations to and from India, including Bengaluru, Coimbatore, Chennai, Hyderabad, Delhi and Goa, through Mumbai. The airline also maintains that the service will enhance its cargo capacity between India and UK to about 1,550 tonnes a week, providing it an additional revenue stream.

Ask George why a passenger will pick Jet’s Mumbai-Manchester non-stop service when the Middle Eastern carriers offer multiple connections from Mumbai to their base in the Gulf and the option of multiple connections to Manchester from there, and he says, “We have been in the UK market since 2005. The airlines you mention have been there since before that and yet we have only grown, be it in the UK, Amsterdam or Paris and strengthening our base in Europe in totality.”

Indian flavour to service

He adds that the airline is offering a level of service which is pegged at the Indian customer. “We offer Indian hospitality and Indian food. We have succeeded despite the fares that the other airlines have been offering. We do not want to compete on low fares because that is not our intent as such,” he says.

What is perhaps helping matters for Jet is that Manchester airport is offering some “incentives” to its new flight. George confirms this but declines to get into specifics as it is “commercially sensitive” information. Incidentally, offering sops like waiver on some charges like landing and parking, which are normally valid only for the first few years, is a normal practice followed by airports globally.

Jet is hoping that with this flight it will be able to replicate what it did in Amsterdam in terms of growing the market two to three-fold. The airline believes that the Manchester route has a good mix of business, leisure and student travellers, which will allow it to fly on this route the year round. The airline will wait and watch the load factors on the route before it decides whether to increase the frequency to a daily flight. “No time frame yet as we are flexible,” George says.

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