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India’s Jet Airways shrinks network to cut costs
November 23rd 2018
Mumbai-based Jet Airways will undertake a "comprehensive review" of its network to cut unprofitable routes and improve the airline's financial standing. Read More »
"The strategy includes concentration of capacity, enhancing frequency, density and hub connectivity. The measures will include rationalisation of operations on selected uneconomic routes and the redeployment of these assets to more productive and economically efficient international as well as domestic sectors," Jet Airways has said.
At the same time, Jet will launch services and/or add frequencies from Delhi, Mumbai and Pune to Singapore in November and December. It also intends to replace B737NGs with more fuel-efficient B737 MAX 8s on certain routes. Despite the network rationalisation, Jet said capacity would remain flat until 2019.
"The airline continues to engage with financial stakeholders in supporting its funding requirements until it starts generating an operational surplus. It is actively working on the monetization of its assets and capital infusion," Jet said.
Jet has accumulated losses of more than INR108.8 billion (US$1.5 billion) in the last decade. Earlier this month, Jet appointed three global consultancies to help it secure funding and aid its restructuring drive.
India’s Live Mint has reported Jet had hired Goldman Sachs Group to identify potential buyers for an equity stake in the airline, Boston Consulting Group to advise on improving the airline’s operational efficiency and McKinsey & Company to map out the development and implementation of cost reductions at the carrier.
In the past quarter, Jet has expanded its codeshare cooperation with Delta Air Lines, Etihad Airways, Korean Air, Malaysia Airlines and Bangkok Airways. Revenue from codeshares and interlining in the second quarter increased 30.9%.
