‘Low fares are not sustainable’

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India will feel the heat, warns IMF

: When Wolfgang Prock-Schauer addressed the media during Jet Airways inaugural flight to Doha from Mumbai last month, it became clear that he was not going to relinquish his position as chief executive officer of the airline. Prock-Schauer spent a good deal of time in 2007 denying that he was joining rival Kingfisher Airlines as its CEO. However, being there when it mattered the most, would quash all rumours, Prock-Schauer knew. He said it as much. "There is nothing I can add to it, except that I am with Jet." Now that the air is clear on that front, Prock-Schauer can focus on his work. Jet has lost market share in the last one year, its thrust on international operations is growing, and the airline’s senior management is quitting, the last being Carl Saldanha, who resigned as chief financial officer. All this means that the burden doesn’t get any less for Prock-Schauer. In this interview with FE’s Viveat Susan Pinto he responds to questions on how he is leading the airline through this phase. Excerpts:

Would you attribute Jet’s fall in market share from 31.2% to 22.6% in the last one year to merely a fall in capacity share or are there other reasons for it too?

The fall in market share is a function of the fall in capacity share. If you look at our capacity share, it fell to the same extent as our market share. All airlines put together added 40 aircraft last year. We, however, added only 2-3 aircraft. As a consequence, our capacity share fell and so did our market share. But if you take Jet and JetLite together, we have a combined market share of 30%. That’s a good figure.

Going forward, we will double our ATR fleet from 7 to 14. We will also look to add two 777s to our fleet. We took a conscious decision in 2007 about not adding too much capacity in the domestic sector on account of the overall capacity expansion that was happening there. This year, however, we are likely to add capacity in the domestic sector. This will impact our market share.

What do you have to say about the low fares in the marketplace?