NEW DELHI: Jet Airways, India’s second-biggest carrier, forecast yesterday a return to profit in three years through cost-cuts, route-sharing with new partner Etihad Airways and restructuring of hefty debt.
The publicly traded airline, which has not posted an annual profit since 2007, has been struggling in an overcrowded market beset by cut-throat fare wars, high fuel costs and shoddy infrastructure.
“The game plan is in place, it’s now about delivery,” Jet Airways’ new Chief Executive Cramer Ball told reporters in New Delhi. “It’s a three-year plan — 2015 we will reduce losses, 2016 we will consolidate and 2017 we’ll have profitability,” he said.
Ball was speaking at the airline’s first news conference with Etihad since India cleared in May the fast-growing Abu Dhabi airline’s purchase of a 24-percent stake in the Indian carrier for Rs21bn ($330m).
Jet’s shares jumped nearly six percent on the turnaround plan before finishing up 3.5 percent at Rs264.95.
Ball, an Australian, said Jet was already profitable on international routes which contribute 43 percent of revenues, a figure he projected would rise to 63 percent by 2015.
All six major airlines, except leading carrier IndiGo, have been haemorrhaging money but analysts project a brighter future longer-term thanks to India’s fast-growing growing middle class.
India’s carriers lost a total $1.3bn in the financial year to March, the Centre for Asia Pacific Aviation consultancy calculates.
Jet’s net loss in the last financial year ballooned to Rs41.3bn from a Rs7.8bn loss the previous year. Debt stood at $1.8bn.
Etihad’s Jet stake enables it to compete better with regional rivals such as Qatar Airways and Emirates which transport a large slice of Indian passenger traffic to the Gulf and beyond.
Etihad’s purchase of a minority stake in Jet came after the government relaxed foreign ownership rules to allow overseas carriers to buy up to 49 percent of local airlines.AFP