Jet Airways Turns Smallest Operating Pan- Indian Airline
The domestic operations of Jet Airways now owns only 12- 15 planes, turning it the smallest operating pan- Indian carrier. According to industry experts, the airlines is ineligible to fly on international routes.
Meanwhile, the debt-laden airline, where lenders have now taken control, has told its Boeing 737 pilots that they could apply for long leave of absence without pay.
Jet is flying 29 planes — ten 737 NGs, seven ATR turboprops for short local routes, and a dozen wide-bodied Airbus A330s and Boeing 777s, said a person close to the matter, compared with 124 planes in December. The four A330s and eight Boeing 777s are used for operating medium and long-haul international flights while the 737 NGs fly on domestic and neighbouring international routes and the ATRs on short local routes. The count is expected to fall further.
In a communication to the Bombay Stock Exchange Tuesday, the airline said it grounded 15 more planes, but didn’t give the current fleet size. It has in several similar piecemeal announcements since January 2019 announced the grounding of close to 55 planes. It has told regulator Directorate General of Civil Aviation that it has a plan to have 75 planes operating by the end of April.
Data sourced from real-time air-traffic-tracking application Flightradar24 over the past one week have shown Jet to be operating 5-10 domestic flights at any time of the day and an equal or higher number of international flights. Vistara, India’s smallest scheduled airline, has 22 planes. Of these, 16 were flying in the afternoon, around the time only eight Jet flights were showed in the local skies.
“Indian rules say an airline has to have a 20-aircraft fleet and 120 daily domestic flights to fly international. As such, Jet is undoubtedly flouting the norms,” said a senior executive at a rival carrier.
A Jet spokesperson refuted this. “Jet Airways is in compliance with applicable guidelines relating to RDGs (Route Dispersal Guidelines) and international operations,” she said. She didn’t respond to questions seeking confirmation on the number of planes operating and how many were deployed on domestic routes.
RDGs are rules that stipulate airlines to deploy specified percentages of flights on certain routes.
Texts and calls to director-general of civil aviation BS Bhullar remained unanswered.
A government official recently said Jet’s curtailment of operations would be reviewed over a period of three months before taking a call. A senior executive at Jet said there was a “grandfather clause”, which protected a percentage of international flying rights once an airline had proven itself eligible for such operations.
But Mark Martin, founder of research and advisory firm Martin Consulting, said Jet was not compliant with international flying requirements and was also not strictly adhering to the route dispersal guidelines. “You have to understand that Jet is now the government’s special child. Which is why a lot of this will be ignored,” he said. “Also, the requirement for flying international is seen more as an experience benchmark rather than a performance benchmark for airlines in India.”
There are also considerations of passengers who have booked tickets and over codeshares with partner airlines while making decision, Martin said. “But overall, the capacity shortage will really affect the pricing, especially with the onslaught of the peak-travel summer season,” he added.
The capacity cut will impact the market share of Jet, India’s second biggest airline behind IndiGo until January. In February, it slipped two notches, to below SpiceJet and Air India. Also in February, India’s domestic air traffic growth slowed to 6.5% on year, compared with 9.1% in January. ET wrote on March 23 that the grounding of planes by Jet reduced seat availability by 1 million seats between January and February.
But Jet’s problems are of basic survival. In addition to grounding a majority of its fleet, it defaulted on Indian and overseas loan repayments, vendor dues and salaries, and also laid off people. In the latest possible jolt, a bank-led resolution plan for its revival may come undone, as the Reserve Bank of India rules it was charted on were declared unconstitutional by the Supreme Court on Tuesday.
Banks were to release an immediate additional debt funding of Rs 1,500 crore for Jet to tide through and part-pay its vendors and employees. People close to the matter said the funds had not been released yet.
Meanwhile, in a communication to pilots, Jet said the crew of its staple Boeing 737 planes would be given a roster of five days working and three days off between April 11 and April 28.
“Additionally, flight crew seeking a long break/sabbatical between April and September 2019 may put in their requests to fleet office for approval,” the communication said.
Pilots of Jet Airways had twice threatened to go on strike but then called off the plans. They and employees in several other departments haven’t received salaries since January.