Jet Airways freezes fleet expansion for now

MUMBAI: With the slowdown casting a shadow on its operations, Jet Airways, India���s second-largest airline by market share, has frozen fleet expansion for now and put off aircraft deliveries for two years, company executives said. The airline is likely to save $145 million (its capital expenditure in FY09) from the move this fiscal. Its load factor has fallen by 10-15% in January-March this year. Domestic traffic was down 38% to 5.52 lakh passengers in April from over 8 lakh a year earlier. ���There will be no addition of fleet, with operations remaining the same in the current financial year. We will expand our fleet once operations stabilise,��� Jet Airways chief executive officer Wolfgang Prock-Schauer told ET.

Most domestic airlines have a large number of aircraft lying unused as they were forced to cut down operations in the wake of the slowdown. The Indian aviation industry incurred losses of about Rs 10,000 crore in the previous financial year.

The Naresh Goyal-promoted airline, which operates over 370 flights daily, was slated to purchase 20 aircraft from Boeing over the next two to three years, with half of them scheduled for delivery in the current fiscal. The Jet-JetLite combine has a fleet of 110 aircraft that include Boeing, Airbus and ATR aeroplanes.

The airline has reduced capacity by a fifth in the domestic market, and is expected to reduce it further. ���We are evaluating the situation as the industry still has excess capacity of 20%,��� said Mr Prock-Schauer. It has cut back on flights through route rationalisation and has already wet-leased nine surplus aircraft. For the previous quarter, it earned revenues of $34 million from leasing out its fleet. The airline expects to save $330 million through route restructuring and cost-cutting programmes.