August 26, 2008

Jet Plans 2nd Hub in Europe

NEW DELHI: Jet Airways may have curtailed its domestic footprint, but the Naresh Goyal-owned carrier has started scouting for a second hub in Europe after Brussels.

This hub would be in a central European country like Switzerland, Italy or Germany and is likely to be activated in 2009-10 when Jet is scheduled to launch the next phase of its international operations by adding new destinations and also increasing frequencies to existing ones in the Gulf.

"This year we'll be getting two more A-330s that will be used to launch flights to Saudi Arabia. We'll also link Bangalore to Brussels and beyond by October-end. The planes that join us from 2009 will be used for the next round of growth that will require a second hub in central Europe. In this phase, we'll look at more flights to Asean, China, North America, Europe and also add Africa to our network by flying to South Africa," Jet Airways chief executive Wolfgang Prock-Schauer said here while launching the Delhi- Dubai flight.

The airline plans to strengthen the existing Brussels hub by linking it to more Indian cities like Bangalore, Ahmedabad and Hyderabad as also to newer ones in North America like Los Angles, Chicago and Vancouver. Because of its aggressive international plans, Jet has so far not cancelled any order for aircraft though it is talking to Boeing to defer delivery of two B-777 from 2009 to 2010.

The airline's focus remains on cost-cutting in the wake of high aviation turbine fuel (ATF) prices. The economy plans worked out so far will translate into a saving of $50 million this year and $ 80 million in 2009-10. In addition, the airline is now looking at reducing its ticketing expenses.

"We are renegotiating with all our GDS providers as the cost per remains a steep $4 on an average for each domestic and international ticket. We are trying to see that this figure reduces. And we are also talking to travel agents on the commission issue," the Jet CEO said. Airlines like Air India, Jet and Kingfisher have decided to move towards a zero commission system as a cost-cutting measure, a move which is facing opposition from travel agents.

Prock-Schaeur also reiterated that Jet would be looking at a fare hike when peak travel season begins next month. Asked if that could happen even if aviation turbine fuel prices fall, he said: "Because of losses so far incurred by all airlines, there's not much room to manoeuvre prices. We may have to look at a hike as there's little chance of a substantial fall in fuel prices."

Indian carriers fear to lose anywhere up to Rs 10,000 crore this fiscal due to factors like high fuel prices and passenger falling load factors due to expensive tickets.

(c) 2008 The Times of India. Provided by ProQuest LLC. All rights Reserved.