Jet Airways looking for a Rs405-crore loan from IDFC
11 September 2007
Jet Airways has postponed plans to come out with its Rs1,620 crore ($400 million) rights issue in October, and has begun talks with financial institutions and banks to raise Rs405 crore ($100 million) for its low-cost subsidiary JetLite.
A senior Jet executive said the airline was in talks with IDFC for the loan, which is being raised for JetLite''s operation and expansion, not for aircraft acquisition. The full-service carrier is looking overseas to boost its revenues.
It plans to add 28 aircraft to its 57-plane domestic fleet and 19 aircraft to its international fleet by 2009. Its subsidiary, JetLite, will add 12 aircraft to its fleet of 28 by 2009. Lately, the airline has been scaling back capacity to improve yields on the domestic sector.
Analyst firm CLSA Asia Pacific Markets predicts that Jet will benefit from consolidation in the aviation sector and the return of pricing power. The CLSA Asia Pacific report says it expects pricing power and load factor to boost the company''s performance from the third quarter of this financial year.
The airline is expanding its international operations, having recently launched flights to the US and Canada, where the traffic growth is robust. On the Mumbai-Brussels-Newark route, Jet is logging a 90 per cent load factor outwards and a 55 per cent load fasctor on return journeys. During the festive and holiday season, this is likely to reverse, as the Newark-Mumbai load improves and the Mumbai-Newark load declines.