Jet Airways to invest $5billion

Chennai: In line with its business plans of increasing revenue from international routes, Jet Airways (India) Limited is planning to invest around $5 billion in the next two years to increase its fleet size. The company is looking at A340-300 E, (investment $3 billion) and Boeing 737 ($2 billion).

Says Peter Luethi, chief operation officer, "We are yet to finalise the funding mix. It could be outright purchase or a lease." Of the 51 crafts that it currently flies, nearly half are under lease agreements while the rest are owned by the company.

According to him, the company gets 15 per cent of its revenues from international routes and the rest from the domestic sector. "In a couple of years the revenue from international routes would equal domestic revenue." To achieve this, Jet Airways is also looking at more overseas routes to fly like Africa, Middle East and the US.

The airline flies passengers to 43 destinations in India and five overseas. One more route - Chennai-Singapore - will be added from December 7, 2005 onwards.

According to Luethi, the average load factor on its international flights is around 73 per cent and in the domestic sector 72 per cent. The daily aircraft availability for the Boeings is 10.4 hours and 12.5 hours for others.

"We expect the proposed Chennai-Singapore route to have an initial load factor of 63 per cent while the target is 75 per cent." This, despite the company pricing the tickets on the route higher than the competition; Jet''s inaugural economy fare of Rs12,000 is 20 per cent higher than the Rs10,000 that other airlines charge.