IATA: Jet Airways eyes return to profitability

Beijing
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Jet Airways is confident of posting a profit in the current fiscal year after restructuring its business over the last year in order to increase revenues and improve productivity.

Costs remain a major challenge for the airline, says its chairman Naresh Goyal during an interview in Beijing. These include the high taxes on jet fuel at both the national and state levels in India and the high airport charges.

"We don't have control over these issues, and so we want to tackle costs aggressively where we can. We are improving productivity in every department from cabin crew to pilots to engineers, rationalising a lot of routes and cutting the loss-making ones such as to Johannesburg, and improving the utilisation of our widebody aircraft," he adds.

That, and higher revenues this year, will mean that the airline will return to profitability in the year to 31 March 2013, says Goyal. The airline made a loss of Rs12.4 billion ($224 million) in the last fiscal year. Although it made a net profit of Rs97 million in the 2010/11 fiscal year, it reported three successive full-year losses before that.

Given that the Indian airline industry seems unable to push the Indian government into relaxing the operating environment, Jet will concentrate on doing what it has control over in the coming years.

"We are looking at how Jet Airways can improve performance and profitability, the morale of the staff, improve service levels, and come back to reasonable profitability. And then we will see how we can expand a little bit on the domestic side. Internationally, we are all affected by the slowdown, but we are trying to find ways to make New Delhi and Mumbai hubs for traffic between Europe and Southeast Asia. Those are our priorities," says Goyal.

Another decision it will make this year is on alliances, with the airline believed to be in talks with both SkyTeam and Star Alliance. "We are in talks with two of them and we expect to make a decision soon, probably by the end of this year," says Goyal.

While some within India and those outside have been calling on the Indian government to relax regulations that prevent foreign carriers from investing in domestic airlines, Goyal says this alone will not be a panacea.

"We don't have a problem with foreign direct investment, but it does not solve any of the problems. How can it solve the problems of taxes, fuel costs or airport charges? It is the government that needs to resolve those," he says.

"In any case, everyone will look at investments if it makes business sense. But we are not really depending on foreign airlines. They can't help Jet Airways."