Jet hopes to get out of air pocket by 2010
Jet Airways has set ambitious goals of achieving a turnover of over Rs 18k cr by the end of the current fiscal and breakeven in 2010. Top airports | World's Best Airport
By Mithun Roy, ET Bureau |
MUMBAI: The Naresh Goyal-promoted Jet Airways has set ambitious goals of achieving a turnover of $4 bn (over Rs 18,000 crore) by the end of the current fiscal and breakeven in 2010.
Last year, it recorded a turnover of Rs 10,000 crore while the combined loss of Jet and JetLite stood at $152 mn (nearly Rs 690 crore) for the year ended March 31.
To achieve these goals, the country���s largest private sector carrier is targeting big revenue from overseas operations. It is also eyeing spurt in corporate traffic to boost its load factor in the next two quarters. To prop up the bottom line, it is working on a plan to integrate its low-cost carrier JetLite with itself.
���The integration is a part of the strategy to enable Jet to register a turnover of $4 bn by end of this fiscal and to be profitable in 2010,��� Jet Airways senior general manager KG Vishwanath said.
Analysts are sceptical about the company���s target of recording 80% jump in the top line. An aviation analyst said the first quarter results indicated that the company would find it difficult to achieve its target. In the first quarter, it recorded turnover of around Rs 3,000 crore. Also, he said that the Indian aviation revenues are expected to grow by 10% compared to 30% last year.
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However, the company thinks the target is achievable through expansion of its domestic as well as international operations. It has recently introduced daily services in the Pune-Bangalore-Pune sectors. The Pune-Bangalore sector enjoys a lot of business traffic and the demand for a premium daily service between the two established IT hubs, specifically tailored to suit the corporate travellers, has been high. On the overseas expansion, the carrier will start a new Bangalore-Brussels service and Mumbai-Saudi Arabia in October. It is also considering a second hub in Germany, northern Italy or Austria. It has a European hub in Brussels.
The proposed merger of its low-cost carrier JetLite with itself is expected to be over in 18 months. The merger is expected to turnaround the loss-making company in 2010. Jet acquired JetLite, earlier Sahara Airlines, in April 2007. It had been reported about Jet���s integration and merger in its edition on August 25. The market share of Jet and Jetlite in India stands at 25% and 6%, respectively.
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Prior to the merger, the low-cost subsidiary JetLite is restructuring its operations, which is expected to be completed by the company���s annual general meeting in September-end. JetLite has already cancelled 15 flights and is likely to scrap around 10 more in the coming months. It may bring down its total flights to around 125 from 150. Apart from this, it will shift around 600 JetLite employees to Jet Airways and few will be given voluntary retirement scheme.
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