Airline News
India Digest: Jet, Air India MRO, SpiceJet
June 8th 2015
Jet Airways’ losses are shrinking and its three-year turnaround “is on track", said Naresh Goyal, Jet’s chairman, as he presented the airline’s results for the financial year ended March 31, which included a 60% year-on-year operating loss reduction to 8.3 billion rupees ($130 million). Read More » Jet Airways attributed the improved performance to network optimisation, its strategic partnership with Etihad Airways, improved airframe utilisation, targeting premium traffic, as well as returning to the full service business model after retiring its JetLite and JetKonnect subsidiaries. For the full financial year, Jet reported a net loss of 21 billion rupees, about half the loss it posted the previous year. Mumbai-based Jet, India’s second largest carrier by market share after privately-held and consistently profitable IndiGo, has not made an annual net profit since 2007.
"FY15 was an encouraging year when we set out to change the fundamentals of this business, allowing us to deliver a significant improvement in our net result. While the Indian aviation market is still subject to ongoing structural challenges and robust competition is placing pressure on yields, we will continue to progress by focusing on delivering an enhanced experience and improving efficiency throughout the business," Goyal commented.
Meanwhile, rival SpiceJet, which was on the verge of financial collapse before being bailed out last December, is finally on a recovery trajectory after it downsized and made major management changes. The ten-year-old budget carrier reported a net profit of 225 million rupees ($3.5 million) for the three months ended March 31, reversing a 3.2 billion rupees loss in the year-ago period. In a statement, SpiceJet chairman, Ajay Singh, said the results “indicated a recovery was in progress” and was evidence of an “ongoing revival” at the airline.
In the interim, The New Indian Express has reported SpiceJet was likely to become the first private carrier to use flag carrier Air India’s new maintenance, repair and overhaul (MRO) facilities in Hyderabad and/or Nagpur for A, B and C checks. The 50-acre Nagpur airframe plant, built by Boeing at a cost of $107 million, opened April 30 and can accommodate several wide- and narrow-bodies at a time. The smaller Hyderabad unit, inaugurated May 29 and developed by Air India Engineering Services (AIESL), a wholly-owned subsidiary of Air India, can accommodate up to two narrow-bodies, or one wide-body. Air India is constructing additional MRO units in Delhi, Mumbai and Kolkata. It hopes to create five billion rupees ($78 million) in additional annual revenue once all facilities are operational.
