More International Operations by Jet Airways

Jet Airways, a popular airlines among Indian travelers, is going to deploy wide body Boeing 777 aircraft on Dubai, Singapore and Amsterdam routes to grow its international business. It is increasing its capacity deployment on international routes because International operations contribute half of Jet Airways revenue.

This is going to intensify competition on Dubai and Singapore routes dominated by Emirates and Singapore Airlines and could lead to a fare war. Emirates and Singapore Airlines, though, have new cabin products. It will also enable Jet Airways to consolidate its presence in Amsterdam, its new European gateway.

Six Boeing 777s are going to re-enter into Jet Airways’ fleet. They were on lease to Etihad Airways and the lease term is going to end.

Boeing 777-300ER planes can seat 346 passengers in a three class configuration.

Presently Jet Airways operates 5 times daily on Mumbai-Dubai route with 168 seater twin class Boeing 737 aircraft. From August 6 Jet will deploy Boeing 777 on one of the services.

Jet Airways flies twice daily between Mumbai-Singapore route. From August 6 one of the flights will be operated with a Boeing 777. From October it will use the Boeing 777 planes on Amsterdam flights from Mumbai and Delhi instead of Airbus A330 planes.

Low Fuel Costs Help Jet Airways Post Profits

Jet Airways, India’s second biggest airline by passengers, reported an annual profit on May 27, 2016 for the first time since 2007 and a year ahead of schedule under its 2014 turnaround plan.jet

Jet Airways is partially owned by Abu Dhabi’s Etihad Airways. Etihad Airways PJSC holds a 24% stake. Jet Airways seem to be financially benefited from its stake sale to Etihad. Apart from giving it a much needed cash infusion, it also brought about synergies in terms of joint fuel uplift, marketing and sales.

Jet competes with state-run Air India and Vistara – a joint venture of Tata Group and Singapore Airlines – in the so-called full-service category. However, Indian Aviation domestic market is dominated by low-cost carriers.jet-pti-L

For the year ending on March 31, its net profit was Rs 12,120 million ($181 million) compared with a loss of Rs 20,970 million in the previous year.This profit is mainly due to lower fuel costs, higher traffic, lower finance costs and higher aircraft utilization and network optimization, which enabled better integration between domestic and international operations through the year ending on March 31.

Net profit in the quarter ended 31 March was Rs 3,971.6 million, as against a net loss of Rs 17,289.9 million in the same quarter a year earlier.

Net sales rose 3.57% to Rs 52,452.8 million in the quarter from Rs 50,645.2 million in the same period a year ago

Jet Airways lowered its debt by Rs 16,800 million during the year but did not disclose the debt detail.

download (5)“The airline would continue to focus on strengthening its balance sheet to sustain growth,” chairman Naresh Goyal said in a statement, although he said competitive and structural challenges remained. “The induction of capacity and the enhanced competitive scenario is creating a constant pressure on yields,” Mr Goyal said. Clearly, Mr Goyal is aware of the competitions and the possibility of ATF prices rising again.

Prices of aviation turbine fuel (ATF) have turned around the fortunes of most Indian carriers. It fell 22% in the twelve months till the end of Financial Year 2016. Jet and other Indian airlines have benefited from a slump in crude oil prices that lowered fuel expenses, which is the single biggest component in an airline’s operating expenses. It makes up around 40% of their total costs. Two other listed airlines also made a profit in fiscal 2016.

Jet’s Fuel costs in the year was Rs 54,033.7 million . A year ago it was Rs 74,018.7 million . A big 27 % drop. A huge saving of Rs 19,985 million. This being the chief  reason for the company to recover from a loss of Rs 20,970 million and post a profit of Rs 12,120 million in one calendar year. 

The air traveler is also benefited as he too gets cheap air tickets which the airlines are able to provide.

ATF price per litre in Delhi:

ATF price have generally shown a downward trend
ATF price has generally shown a downward trend

– Today, is at Rs 42.15,
– in June 2015 it was Rs 53.35,
– in October 2013 it was Rs 77.09

Last month, IndiGo, India’s biggest airline, too reported a record net profit of Rs.19,900 million in the year ended 31 March, while SpiceJet Ltd posted a record profit of Rs 4,070 million for the year.

InterGlobe Aviation Ltd’s IndiGo is India’s top carrier with 38.7 per cent of the market as of April.

Jet Airways and Jetlite together had a market share of 18.9 per cent in April, down from 23.1 per cent a year ago.

Jet Airways offers special discounted fares for Amsterdam

Jet Airways, the Indian airline based in Mumbai, the second largest airline in India, both in terms of market share and passengers carried, after IndiGo, would offer special discounted fares for Amsterdam, which is set to become the private carrier’s new European Gateway from March, for a limited period.
Under the five-day offer, which can be availed till January 15, Jet Airways has cut ticket prices by up to 16% for both Premier and Economy class passengers travelling to Amsterdam from New Delhi and Mumbai.

The airline has already announced commencement of two daily non-stop flights, one each from its domestic hubs –Mumbai and New Delhi — to the Dutch capital from March 27. Besides, it will also operate a daily flight from Toronto in Canada to Amsterdam.
“We have received an overwhelming response to our new routes to and from Amsterdam since announcing them last month. The inaugural offer acknowledges the support from our guests, providing them with greater value when travelling to our new European gateway,” Jet Airways senior vice president (commercial) Gaurang Shetty said. From Amsterdam, Jet Airways will be able to provide its passengers with one stop access to a wider array of destinations across Europe and North America with its partners, he said.

The airline had last month also announced code sharing pacts with KLM and Delta Air Lines along with its decision to shift the European Gateway to the Dutch capital from Brussels. Code-sharing of flights allows an airline to book passengers on its partner carriers and provide seamless transport to multiple destinations where it has no presence.

Under the inaugural offer, passengers travelling from Mumbai to Amsterdam in Economy class can book all-inclusive return tickets for Rs 33,734 while those travelling in Premiere (business) class can avail an all-inclusive return ticket for Rs 1,47,071, it said.

The fares for the same from New Delhi will be Rs 37,211 (Economy) and Rs 1,12,480 (Premier), the airline said. Special fares are also available for travel from Amsterdam to India, it said.

Jet Airways passengers from Canada can also avail the offered fares while they book on the airline’s new service between Toronto and Amsterdam, it said.

Similarly, Jet Airways has also extended the offer to guests travelling to Amsterdam on the airline’s network from ASEAN and SAARC countries via Mumbai and Delhi.The codeshare pact with the two global airline, which when approved by the government, would provide seamless air connectivity to Jet Airways passengers to as many as 41 European and American cities from India.

PTI Inputs