India’s second-ranked airline by passengers carried, Jet Airways (India) Ltd, has been permitted by the aviation ministry to expand services to West Asia, connecting four Indian cities with Sharjah, raising concern among smaller rivals planning to fly to the region that their large peers are hogging limited, bilaterally negotiated rights.
Jet entered the West Asia market in January last year on expiry of a rule that allowed only the national carrier—National Aviation Co. of India Ltd, or Nacil, that runs the Air India services—to fly to this region. With some six million Indians estimated to be working in the region, with about a quarter of them in the United Arab Emirates, Jet Airways expanded quickly into these lucrative routes as part of its first phase of international expansion that included connections to the US and Europe.
Of the 18 cities it connects internationally now, six are in this region, including Dubai, Abu Dhabi, Bahrain, Doha, Kuwait and Muscat. It plans to add three more cities—Riyadh, Jeddah and Sharjah—to its West Asia network.
Kingfisher Airlines Ltd, Jet Airway’s bigger rival by share of passengers carried, which flies to London, Dhaka and Colombo, does not operate flights to West Asia yet.
A Jet Airways spokeswoman confirmed to Mint that her airline had received permission for flights to Sharjah but declined further detail.
Outbound: Jet Airways chairman Naresh Goyal. Six of the airline’s current international destinations are in West Asia. Ramesh Pathania / Mint
The permissions for Jet Airways from the outgoing government cover daily services to Sharjah from Kochi, Kozhikode (formerly Calicut), Thiruvananthapuram and Mumbai, according to a senior government official who wanted to remain anonymous.
The airline earlier this year started flying the Chennai-Dubai and Mumbai-Kuwait routes even as it cut down on domestic routes.
“The introduction of these new flights will serve to further strengthen our Gulf network, better enabling us to offer passengers seamless connectivity and a world-class product on the Indo-Gulf sector,” Wolfgang Prock-Schauer, chief executive officer, Jet Airways, said in an April statement while announcing the launch of Mumbai-Riyadh and Mumbai-Jeddah services.
The ongoing expansion by large carriers to West Asia is likely to make it difficult for smaller carriers such as SpiceJet Ltd, which too is in the process of selecting routes to fly international next year when it completes flying the stipulated minimum of five years on domestic routes for eligibility to fly overseas.
On routes in countries in West Asia or those such as China, the civil aviation ministry grants rights to carriers based on agreed bilateral rights with each of those countries, and several West Asian routes have already used up the maximum number of flights.
SpiceJet may have to keep in mind the bilateral capacity while selecting the routes it chooses to fly, said Samyukth Sridharan, its chief commercial officer. “It is too early. We are still doing our study and will finalize (routes) by mid-July,” he said of the international operations from next year. “Obviously we will have to keep that (bilaterals) in mind.”
An aviation expert said the ministry should check if the permission given to Jet Airways to fly on any overseas routes governed by bilateral agreements are utilized or not. “If not, other carriers should get an equitable share,” said Kapil Kaul, India CEO for the Centre for Asia Pacific Aviation, an aviation consultancy.
The permission given to Jet Airways comes at a time when the airline has been told by West Asian carriers to which it had leased four long-haul Boeing Co.-made 777 planes to that the aircraft will be returned by the end of this year. A Jet Airways executive, who asked not to be identified, said it was in talks with two SouthEast Asian airlines and one West Asian carrier to lease out these aircraft for six more months after December.
The once profitable Jet Airways has seen its losses mount over the past three years, and analysts expect it to post a loss of Rs150-250 crore for the last quarter of fiscal 2009.
If the airline is unable to clinch the new leases, this executive said, it could result in changes in its international operations or parking the planes on ground.
Jet Airways has revealed that two new flights from Mumbai to Riyadh and Jeddah will be launched effective June 14, 2009. Both flights will be a daily flight and will be operated by Boeing 737-800 with winglets. The flight timings are as follows
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