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Jet Air Defers Launch Of Hong Kong Flights
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Indiaīs Jet Airways has delayed the start of its New Delhi-Hong Kong flights by a few months, a senior official said, signaling deepening gloom in an industry buffeted by high oil prices.
There are no plans "at the moment" to rationalize other routes, Executive Director Saroj Datta said on Monday.
"We are deferring New Delhi-Hong Kong flights to the winter, taking into account the requirements of the market, and redeploying the capacity," he said.
The flights had been scheduled to start in June.
State-run rival Air India is examining its schedule but has not made a decision yet, a spokesman said.
"We are taking a long, hard look at our schedule because of the extremely difficult conditions... with the unprecedented and unabated rise in fuel prices, which are affecting the economic viability of flights in certain sectors," he said.
Indian jet fuel prices have risen nearly 90 percent since last June, which may cause Indian airlines to double their losses in 2008/09 from INR40 billion rupees (USD$932 million) a year ago, the civil aviation secretary said last week.
Jet fuel prices, which make up nearly 45 percent of an Indian carrierīs operating cost, are about three-quarters higher than international benchmarks on account of local taxes.
Airlines have said they may look at rationalizing routes and cutting capacity, and discount carrier SpiceJet last week said it would consider temporarily suspending some flights.
Jet, Kingfisher, budget carrier Deccan Aviation and Air India raised their fuel surcharge last week, but the airlines would also need to rethink their strategy, said Kapil Kaul, chief executive for India at the Centre for Asia Pacific Aviation.
"High fuel prices are here to stay, so itīs important that airlines take another look at schedules and staffing, instead of waiting for the market to turnaround."
"Jet in particular, has been very aggressive in its international expansion, and they really need to consider if they should continue at that pace for the next 12-18 months," he said.
Jet, which is scheduled to launch daily services from Mumbai to San Francisco via Shanghai later this week, is adding more destinations in North America, Europe and Asia as it aims to get half its revenue from international operations by March 2010.
Jet, which has 10 Boeing 787s on order, has delayed reporting its fourth-quarter and full-year earnings. Chairman Naresh Goyal has said he expected the airline to turn a profit in 2009/10, in line with improved industry earnings.
(Reuters)
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