Jet Airways on Wednesday said that it has raised the fuel surcharge on tickets by 400 rupees across all domestic sectors effective June 17.
The move comes a day after state-run oil firms raised jet fuel prices by over 12 per cent from June 16, according to the website of Indian Oil Corp.’s, the country’s biggest refiner.
Jet Airways on Friday said it would retrench excess staff to tackle the financial crisis it faces following the global slowdown, but stressed that reports of huge layoffs were overstated.
“Retrenchment is the last resort for us. We have excess staff,” a Jet Airways spokesperson told reporters. “But reports appearing in the media about huge layoffs are grossly overstated.”
Justifying the decision, the carrier said the worldwide economic slowdown has had an adverse impact on all businesses including the aviation sector.
The country’s second-largest private carrier Jet Airways has sacked 50 employees and referred them to an in-house out placement cell, which will help the employees look for jobs with other airlines. Interestingly, Jet has taken this decision when the country has just concluded its general elections with formation of the new government just some days away.
The airline has suffered mounting losses coupled with rising debts. Sources familiar with the development said there will be another round of retrenchment, as the cabin crew has filed its attendance only till May 15. Responding to a query, Jet Airways spokesperson in an e-mail response said the airline has issued notices of termination to some cabin crew on probation in accordance with the terms of their contracts and in compliance with the law. Last year, the airline had given termination notices to some 1,900 employees, which had to be revoked after the government had to intervene and huge protests from its
As part of its ongoing effort to boost tourism within India, Jet Airways and Department of Tourism, Government of Kerala, have announced the launch of ‘Jet2Kerala’, a new domestic travel initiative at the Trident, Nariman Point, Mumbai.
Jet Airways and Kerala Tourism, two super brands, will leverage their respective brand equities to boost tourist traffic into ‘God’s Own Country’.
Air travellers could be treated with another round of fare cuts, as the country’s leading full service carriers take a fresh aim at the budget airline space amid worries about the deteriorating financials of the industry.
The country’s oldest private carrier Jet Airways, which already operates a wholly owned low-cost airline JetLite, has launched another low-cost service JetKonnect, while Kingfisher Airlines is increasing the number of flights on low-cost Kingfisher Red routes. There are early indications that the country’s largest budget airlines— IndiGo and SpiceJet — will respond aggressively to the development.
Sahara Commercial Corporation on Thursday filed an application in the Bombay High Court alleging that Jet Airways had committed breach of contract in the takeover deal and was liable to pay it (Sahara) Rs 2,000 crore instead of the renegotiated Rs 1,450 crore agreed on by them.
While Jet sought four days to file a rejoinder to Sahara’s application, the Court has given the airline time till this afternoon to go through the application, and it will then hear the matter. The court will give the date of the next hearing today.
Jet bought Sahara India Airlines from the Sahara Group in April 2007 for Rs 1,450 crore after an arbitration award. Naresh Goyal-led Jet paid Rs 900 crore, and was to pay the balance in four instalments.
Private carrier Jet Airways on Monday said Ravi Chaturvedi has quit the company as Group CEO in March, ahead of his scheduled departure
in June.
In a filing to the Bombay Stock Exchange, the airline said: “Ravi Chaturvedi has ceased to be the Group CEO of the company with effect from March 25, 2009, instead of June 1, 2009 as communicated earlier.”
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Jet Airways on Sunday said that current airfares offered by various airlines are not sustainable. The airline, which is expected to
post a loss this quarter, is looking at leasing out more aircrafts, particularly from B737 family, as the industry fails to stimulate demand. The carrier has already leased nine wide-bodied jets including B777 in the last few months in order to contain losses.
“As compared to October-November level, airfare has gone down by 50%. Even lower fare has failed to create demand. We are approaching to peak season but still continue to offer apex fares. This shows that things are not improving,” Jet Airways chief commercial officer Sudheer Raghavan said at a seminar hosted by GMR group.
Jet Airways, which has already reduced its capacity on international routes, has said that it may further reduce capacity by 8-10 per cent, Mr Saroj Dutta, Executive Director of Jet Airways, said.
Taking part in a panel discussion on the impact of the economic crisis on the aviation industry at the Routes summit here on Monday, he said reduction in capacity was essential to increase yields in a challenging environment. Last year, it reduced 12 per cent of its capacity.
Mr Dutta, however, hastened to add that the reduction of capacity would depend on the reduction of capacity by the industry.
Talking to reporters later, he said the talks with Kingfisher for collaboration were on. “We are working on cooperating in some specific areas. I can’t give a timeline,” he said.
The civil aviation ministry is annoyed with German carrier Lufthansa for its apparent backing of Jet Airways for inclusion into Star Alliance — a route-sharing club comprising a score of carriers from across the world — while state-run Air India is still waiting in the wings, a government official here said.
Lufthansa’s support is important as it is the nodal member in the alliance. Following instructions from the civil aviation ministry, the Indian embassy in Germany has now written to Lufthansa, pointing out that the carrier’s move to back Jet Airways would put Air India (AI) at a disadvantage.
Petroleum Minister Murli Deora today said private airlines Jet Airways and Kingfisher owe Rs 800 crore to the three oil PSUs, Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum on purchase of jet fuel.
“Just yesterday, I was told by (Union Civil Aviation Minister) Praful Patel that Rs 800 crore is still to be given by them (private airlines),” Deora told reporters here.
He was replying to a question on the amount of losses oil marketing companies (OMCs) incurred due to delayed payments on purchase of Aviation Turbine Fuel (ATF).
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Jet Airways is examining the option of leasing out more of its aircraft to foreign airlines, even as the tenure of the wet-leases to Turkish Airlines and Gulf Air will be extended by over two years.
An airline spokesperson told Business Line that at the end of the six-month wet lease agreement for three B777-300ERs with Turkish Airlines, the aircraft will switch to a 25-month dry lease agreement.
In the case of Gulf Air, a 36-month dry lease agreement will follow the six-month wet lease agreement for four B777-400ERs.
Jet Airways, which operates three uber-luxury Boeing 777-300ERs on international routes, will add one more by July. Two of these operate on the Mumbai-London (Heathrow) route and one more on Delhi-London route while another will be used on a rotation basis.
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It’s been a good new year for air travellers. As aviation turbine fuel (ATF) prices fell sharply last year, most airlines
reduced their
fares during the new year. But Kingfisher’s yet to come up with a fare cut announcement.
In fact, Kingfisher’s delay in announcing the percentage of fare cut has benefited Jet Airways. Passengers have quickly moved over to Jet, and have started bookings tickets on sectors where both airlines have flights. It’s not yet known why the delay in announcing the cuts but an industry source said there were some miscalculations between Jet and Kingfisher alliance on the fare cut decision.
It was learnt that Jet-Kingfisher alliance had agreed to similar amount of fare cuts to be implemented on the same day. But now, Kingfisher is considering both basic fare and fuel surcharge cuts of around Rs 600 and Rs 400, respectively, which would be implemented next week, the industry source added.
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The state-owned carrier Air India has cut fares by up to 82% in 20 sectors on Tuesday, mostly on metro routes, following a dip in aviation turbine fuel (ATF) prices. ”The airline is cutting basic fares by 35-82% on domestic sectors,” said a spokesperson of National Aviation Corporation of India (Nacil), which controls Air India.
Jet Airways’ subsidiary, JetLite, too reduced basic fares on all its domestic flights with immediate effect. These fares will now be lower by up to 40%, Jet Airways said in a statement on Tuesday. A Mumbai-Delhi economy class basic fare will now be available for as low as Rs 750; the Mumbai-Chennai basic fare is at Rs 595; Ahmedabad-Goa is at Rs 245, while the Delhi-Hyderabad fare at Rs 999, without taxes.
On Sunday, Kingfisher Airlines chairman Vijay Mallya promised to slash fares from January 1. While he did not mention the exact percentage, experts believe it could be in the 10-15% range, which means fares could drop by Rs 500 to Rs 1,000. Jet Airways had already cut its basic fares by 15-40% with effect from Monday.
Jet Airways and its 100 per cent subsidiary, JetLite have introduced a 21-day advanced purchase fare of Rs 250 and Rs 9 respectively.
A passenger wanting to avail himself of these fares will have to make a booking by January 31 and ensure that the date of travel is at least 21 days after the booking has been made.
The country’s largest private carrier Jet Airways is looking at buying a stake in the maintenance, repair and overhaul (MRO) facility at
the new Hyderabad international airport, according to a source close to the development.
A senior Jet Airways official declined to comment on the ongoing negotiations, but agreed there was a proposal to buy a stake in the MRO facility. No further details are available at this stage.
German carrier Lufthansa pulled out of a joint venture with Hyderabad International Airport. The airport, nevertheless, has signed an agreement with Malaysian Airlines. The MRO centre is promoted by the GMR group, which also operates the airport. It will handle all types of aircraft, including the A380s.
India’s two largest private airlines — Kingfisher Airlines and Jet Airways — are actively contemplating another round of fare cuts if the
Aviation
government puts aviation turbine fuel under the "declared goods" category.
In a statement on Monday afternoon, Kingfisher Airlines said: "Once the government brings ATF under the declared goods category, we will immediately and significantly reduce fares."
Sources said Jet Airways, which has an operational alliance with Kingfisher, may also take a similar decision if ATF comes under declared goods.
Private air carriers Kingfisher Airlines and Jet Airways, which have entered into an operational alliance recently, may reduce flights
as they tighten belts to overcome financial crunch.
"We are not going to unnecessarily deploy capacity which we cannot fill…if in non-peak hours Jet flight is not full and Kingfisher flight is not full, it makes sense for us to co-operate and fly one aircraft instead of two. (With this) the economics of airlines will improve substantially," Kingfisher Chairman and CEO Vijay Mallya told reporters here.
He also said the two private carriers would co-operate on international routes, even as Kingfisher’s plans to start non-stop flights to San-Francisco has been put on hold.
With Jet Airways and Kingfisher Airlines struggling to combat the rising costs, employees of both airlines have begun scouting for jobs in competing, low-cost airlines such as SpiceJet and GoAir.
“We have started sending our resumes to the low cost carriers as our take-home salaries will be almost at par with low cost carriers once Jet’s plan to shift a major portion of our fixed income to the variable component comes into effect in November,” said a ground handling staff member of Jet Airways. Full-fledged airlines currently pay higher salaries compared to the low-cost carriers.
Amongst its primary cost cutting measures will be the pay and perks of the top 200 of its people.
Jet Airways, the largest private airline in the country, is planning to slash the pay of its top 200 officials by anywhere between a quarter or a third in order to combat costs. The firm is also reported to be undecided on the payment of a Diwali bonus this year.
Reports quoted officials of the airline as saying that the proposed salary cut would impact Jet employees who make Rs10 lakh or more each month, and could be effective as early as next month. Reports say an official announcement is likely just before the weekend, ahead of India’s largest festival, Diwali.
