Jet Airways

Jet Airways (9W) currently operates 12 Airbus A330s and 10 Boeing 777s (refer to fleet information here) from its hubs at Indira Gandhi International Airport (DEL) and Mumbai Chhatrapati Shivaji International Airport (BOM). It is looking to sell some of these planes to trim costs.

Details

The sale of 6 A330s and all 10 777s was noted on SpeedNews.com’s lease/sell listing.

SpeedNews.com listing – image taken from speednews.com on April 27, 2015

Before we explain this potential sale, we will start by introducing 9W’s current current international network.

Jet Airways International Network – Information taken from airline’s website on April 27, 2015

Of the 22 international destinations served, Jet Airways only uses widebody Airbus and Boeing aircrafts on six of them through eight routes:

Toronto (YYZ) to Brussels (BRU) – A330
Newark (EWR) to Brussels (BRU) – A330
New Delhi (DEL) to Brussels (BRU) – A330
Mumbai (BOM) to Brussels (BRU) – A330
New Delhi (DEL) to London (LHR) – B777
New Delhi (DEL) to Paris (CDG) – A330
Mumbai (BOM) to Paris (CDG) – A330
New Delhi (DEL) to Hong Kong (HKG) – A330

Analysis

There are many reasons why 9W would like to most of its widebody aircrafts.

Route Management

Both Air India (AI) and Jet Airways have been under pressure from worldwide airlines in filling seats in/out of India. This is especially problematic when the India was downgraded to a category 2 country after failing an ICAO safety audit back in 2012. This downgrade effectively stopped all Indian airlines from receiving approvals for new routes and repurposing aircrafts for existing routes.

Without additional business opportunities, 9W have been actively wet-leasing its Boeing fleet to airlines such as Turkish Airlines (TK), Thai Airways (TG), Gulf Air (GF), and Etihad Airways (EY) in search of extra money. However, this should not be their long term plan as it may cost them more money to cover additional costs (e.g. maintenance, upgrades) not specified in the leasing contract.

Etihad Airways

On November 12, 2013, Jet Airways received formal government approvals to sell 24% of its stake to Etihad Airways (refer to this link for more information). This strategic alliance allows the Indian airline to feed all international passenger traffic to the gulf carrier through codesharing. Although this may not be the ideal business decision, codesharing would allow Jet Airways to focus on its domestic operations (refer to our coverage of the Indian aviation market) while still earning a share of the revenue.

Future

If Jet Airways is able to find buyers for its widebody aircrafts, expect them to announce route reductions (starting with HKG, YYZ and EWR). All of these destinations can be served through codesharing with Etihad Airways. In the next 6 months, more codesharing would be announced between these two partners with Etihad Airways adding more frequencies to DEL and BOM. The reduction of its international route network would also help Air India.

Final Call

Jet Airways is looking to strengthen its finances by selling its widebody aircrafts and focus on its domestic operations. This may start a new chapter for the Indian airline has it continues its battles at home.

Jet Airways Is Selling Its Airbus A330s and Boeing 777s