Ambitious plans for Jet Airways

Looks like Jet Airways is planning to become an equal partner in their alliance with Etihad, which was recently approved in principle. I come to this conclusion because latest news reports talk about significant fleet expansion by Jet, though I’m also a little perplexed by the choice of equipment they plan to purchase.

Earlier today, the Economic Times reported that Jet plans to induct one new aircraft every month (that’s their way of averaging a proposed purchase of 12 aircraft this year – all narrow-body Boeing 737s). In this article, it also goes on to say that Jet will conduct a 10-year study of routes and network before it takes a decision to order new planes.

Which seems to vary from the next article, on Business Standard, about Jet planning to add 6 B737s in its fleet by end of FY14. But it does add, that Jet expects a 10-12% growth in revenue from international operations, going up from 57% as of now. I’m guessing there’s a strong possibility of India-Middle East (AUH perhaps???) routes on the back of the Etihad deal, and also, other short-haul destinations?

And finally, the mother of all – LiveMint reports that Jet has placed orders for 50 737 Max aircraft, scheduled for phased delivery starting 2018. Now the Max is an improvement on the 737 NG, and the biggest difference is the use of the larger and more efficient CFM International LEAP-1B engines. It was reported on 7 August 2013 that Jet had placed this order, making it the first Indian airline player to do so. The list price of each of these birds is estimated at just over US$ 100 million, but obviously with an order of this size, actual prices are likely to be way lower, which is the industry norm.

All of this points to one thing – aggressive moves by Jet in the short and medium term, to regain its former glory. It also needs a good number of crew and personnel to help it succeed with these levels of planned aircraft acquisition. One view is, that the personnel bit is already in place. I doubt it. Nonetheless, if all of this works out, then we may well see some shake-up in the Indian skies yet again.

Jet has indeed lost out a good portion of the market share it used to command. Two factors have largely resulted in this, in spite of Kingfisher winding down operations in recent times – more low-cost options (read Indigo, SpiceJet, GoAir), and very good on-time performance by other airlines (that would be Indigo). Jet hasn’t really endeared itself to the mass market, and I often get to hear people cribbing about how high-and-mighty Jet has become. Maybe it is now time to tone some of that down, and focus on growth.