Once mighty Jet Airways to fly only domestic initially as it resumes ops
Jet Airways is set to resume operations from September after receiving the airline operating permit from the Directorate General of Civil Aviation (DGCA). Airline officials in the know have told Business Standard that it will restart operations with 20 aircraft and will only fly on domestic routes initially.
All these aircraft will be brand new and will be leased from foreign lessors. None of the older planes leased or owned by Jet will be used as the airline – which suspended commercial operations on April 17, 2019, due to financial distress – takes to the skies again.
All the new aircraft will be narrow-bodied planes. A decision on whether these will be Airbus A 320 Neos or Boeing’s 737 MAX will be made public over the next few days.
Also Read: How the Ukraine war may give wings to Jet airways’ international plans
On Tuesday, the airline kicked off its recruitment drive for pilots, tweeting: “Inviting pilots who are current and type-rated on the Airbus A320 or Boeing 737NG or MAX aircraft, to apply to join us in creating history as we prepare to relaunch India’s classiest airline.”
The airline will commence operations only on domestic routes and no international flights are planned upon resumption, said the official.
The airline has told the government that it plans to add another 20 aircraft to its fleet by the end of 2024. By 2030, Jet plans to have a fleet of 150 aircraft, Minister of State for Civil Aviation VK Singh informed Lok Sabha last week.
This means that while Jet will be starting with almost the same fleet strength as Rakesh Jhunjhunwala backed Akasa Air, it will be twice the size of Akasa by the end of this decade, going by the Lok Sabha reply. Akasa Air’s 72 plane deal with Boeing runs through 2030 with the last plane delivered by that year’s end.
Jet’s decision to start with a fleet of brand new planes will benefit the airline on two counts. Firstly, Jet Airways has leased its planes to other carriers like Air Serbia, which yield income for the airline. These planes have become a bone of contention between Jet Airways and its lenders as the airline looks to settle its past dues as part of its resolution plan. Banks, led by the State Bank of India (SBI), have reportedly threatened to launch insolvency proceedings against Jet Airways if it does not pay them the Rs 108 crore received as rentals from Air Serbia for these planes as part of the settlement process. Operating with these planes that are embroiled in this tussle could jeopardise operations once the airline resumes flying in India.
Secondly, a brand new fleet would bring significant savings in terms of fuel and maintenance expenses, which make up over half of any airline’s operational costs.
Jet has decided not to fly international initially despite the government scrapping the 5/20 rule in 2016. This rule required airlines to have flown at least for five years and have a minimum fleet of 20 aircraft to be allowed to fly overseas. Coincidently, it was at former Jet promoter Naresh Goyal’s insistence that the rule was introduced in 2004.
The Narendra Modi government scrapped the five-year experience requirement but the new civil aviation policy still requires airlines to have a fleet of 20 planes or a reserve 20 per cent of their fleet for domestic routes, whichever is higher.
The decision to restart operations only domestically on a limited scale is a big departure from Jet’s past, when it commanded the highest international passenger market share in India. It was the only airline other than Air India flying to the US with a fleet of wide bodied Boeings. It had the highest international seat capacity among all airlines in India.
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