Jet Airways may cut 10 percent capacity

March 30th, 2009 - 8:47 pm ICT by IANS  

Hyderabad, March 30 (IANS) India’s leading private airline Jet Airways, which cut capacity by 12 percent last year, may reduce it further by 10 percent this year in view of the falling passenger traffic, a top official said here Monday.
“This year we are not increasing capacity. We will cut capacity where it is possible. For instance, we may substitute longer routes with shorter ones,” Jet Airways executive director Saroj Dutta said at the seventh Routes Asia, a premier event for the airlines and airports in the Asia Pacific region.

Dutta added that there would also be substantial cut in staff cost, but clarified that there would be no layoffs.

“There can be cut in staff cost without layoff like the salary cuts, freeze on hiring and not filing vacancies arising out of resignations and retirements,” he told reporters on the sidelines of the event.

Dutta, however, hastened to add that capacity cut by Jet Airways would depend on what industry does.

“If other carriers don’t cut the capacity, we will have to be very careful to see whether we should by ourselves cut capacity or will it have an impact on the market and our market share,” he said.

He did not agree that cutting the capacity alone would increase the yields. “Unless the economy improves, not much can be done.”

Dutta called for reducing the input costs and said the government instead of enhancing the taxes should come forward to the rescue of the airlines.

Kapil Kaul, chief executive (India sub-continent and the Middle East) of the Centre for Asia Pacific Aviation (CAPA), said the aviation sector could see some revival in the third quarter of the current fiscal.

However, other experts were not that hopeful.

Quoting International Air Transport Association (IATA) estimates, GMR Hyderabad International Airport Ltd (GHIAL) board director Rigas Doganis said the number of passengers would likely go down 5.7 percent in 2009.

Cargo traffic is expected to fall 13 percent, while the airlines’ revenues would dip 12 percent, or $63 billion, he added.

“However, the good news is that prices of oil have gown down. The aviation fuel prices fell two-thirds. Thus the global aviation industry saved $52 billion. There is still a shortfall of $11 billion,” Doganis said.

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