Jet looking to dilute stake, hike fares

Written by Corporate Bureau | Mumbai, Sep 29 | Updated: Sep 30 2008, 07:23am hrs
Private carrier Jet Airways is looking at diluting 10% of its equity to international funds, and, if the market conditions are favourable, extend the dilution to 15%. On the sidelines of the 16th annual general meeting of the airline, its chairman Naresh Goyal told reporters that the airline will increase fares next month. It will also invest nearly $1 billion over the next three years towards purchase of five A-330s and three Boeing-777s.

While addressing the shareholders, Goyal said, It has been estimated that the losses incurred by the aviation sector during the 2007-08 fiscal stood at Rs 4,000 crore and is expected to double during the current fiscal. He added that the cost of aviation turbine fuel (ATF) is nearly 60% higher than the international prices. However, if the central and state governments remove the burden of high tax structure from the sector, there will be some benefits reaped by the airlines.

However, while addressing a volley of questions put forth by the shareholders, KG Vishwanath, senior general manager - MIS & investor relations, said that the airline was in talks with private oil companies for the supply of ATF, subject to legal procedures to achieve cost efficiency. The airline will soon add newer international destinations to its existing network like Saudi Arabia and Jeddah on the Gulf route, he said.

Vishwanath also added that the two simulators installed by the airline had brought down their pilot training cost by nearly $8-10 million.

Previously, the airline sent its pilots abroad for training purposes. Our captive consumption of the simulators is 70% and the rest can be given to other airlines to meet their training requirement, said Vishwanath.