'Domestic airlines to lose $1 bn in 2007-08'

MUMBAI: Domestic airlines are flying towards a combined loss of close to $1 billion (about Rs 4,000 crore) in 2007-08 , according to Jet Airways chairman Naresh Goyal. Irrational pricing policies and overcapacity have led to this situation though most airlines will be able to cut losses partially because of sale and leasebacked deals for their aircraft with banks, he said. Jet Airways, too, will lose money this fiscal, but Mr Goyal said the airline would return to profitability in a year.

Most of the action in the next year for Jet will be in the form of increased international operations that will take the Mumbai-based carrier to new destinations like Hong Kong, Shanghai, San Francisco, Milan, Muscat and Riyadh in Saudi Arabia. Jet hopes to increase revenues (including subsidiary JetLite) to close to $4 billion (Rs 16,000 crore) in a year. Revenues from international flights will be half of the airline���s topline by 2010, Mr Goyal told reporters in Mumbai.

China is the new focus region for Jet Airways. The airline expects to start operations from Mumbai to San Francisco via Shanghai from May and is waiting for the required permit from Chinese authorities. It hopes to pick up a lot of passengers from China for the flight. The airline will hire Chinese crew and has begun recruitment . The idea is to tailor its product to Chinese passenger needs. ���We are studying what the Chinese want in terms of food, service and inflight entertainment ,��� Mr Goyal said.

Speaking to ET, chief commercial officer Sudheer Raghavan outlined the changes in the airline���s operational structure. The sales team in India and abroad has been realigned to make it more effective, he said. Jet has a sales force of about 400 people in India. Domestic and international tickets were earlier handled by separate teams, they will now be integrated.

���This presents a common face to the customer and the travel agent, providing more effective delivery,��� he said. India is now divided into seven regions with a senior person responsible for all sales in a particular region. The four metros are regions by themselves. Mumbai, for instance is a separate region and the rest of western India a different region.

In another strategic decision, the Jet management has decided to fully separate the sales and marketing functions of JetLite and Jet Airways. The Jet management has just hired a new expat CEO for the airline and hopes that operations will improve in 2-3 months.