With both the Indian and Chinese governments agreeing to a full fifth freedom last month, the doors have opened for Indian carriers to tap the lucrative United States west coast market through the Middle Kingdom as well as tap China's growing tourism market. This will give Indian carriers the ballast to challenge established foreign carriers like Singapore Airlines and Cathay, which have picked most of the India-US traffic.
"The markets do not remain the same forever but still, anything that makes sense to Jet Airways' shareholders will make sense for the promoters as well," Goyal said. Together with JetLite, formerly Air Sahara, which Jet bought last year, the airline controls over 29 per cent of the Indian domestic market.
Private carrier Jet Airways is expected to further consolidate its international operations into a major revenue grosser in FY09, to overcome the growing turbulence in the domestic sector. The general economic scenario does not bode well for capacity expansion on domestic routes, with some of these struggling on account of overcapacity, and only yesterday some airlines were pushed to hike fares to make up for higher aviation turbine fuel prices.
After Frankfurt, the airline may opt for Munich as its other base in Europe. "Air India would ideally want to have both Frankfurt and Munich as European hubs as the airline does not want to vacate Frankfurt and also wants to establish Munich as a hub for operations after network expansion plans come through," said an Air-India official close to the development, not wanting to be quoted.
GMR Hyderabad International Airport Ltd, the consortium operating the new Hyderabad airport, has offered to halve ground-handling charges even as the civil aviation ministry allowed the domestic carriers to undertake their ground-handling till January 1, 2009. This will give the two sides enough time to resolve the contentious issue, which almost jeopardised the opening of the new airport and forced a postponement once.
Global equity companies have no plans to put their money in the Indian aviation industry even though the carriers are seeking $2.5 billion in cash for expansion. Most players are looking at investing in into large established airlines, but right now are in the wait and watch mode. It will therefore be difficult for low-cost carriers to get funding. The losses of the Indian aviation sector and high valuation expectations are the reasons why investors are not interested.
India's largest private sector airline Jet Airways has postponed its $400 million (Rs 1600 crore) rights issue slated for March this year by three or four months, the third postponement since the board approved it in June, owing to poor market sentiment.
With the Bangalore airport announcing stiff user developmental fee on domestic passengers, low-cost carriers JetLite, SpiceJet and Simplifly Deccan (formerly Air Deccan) have decided to drastically cut their flight schedules to the city and other new airports like Hyderabad.
An 18-month to two-year delay is expected in the Mumbai airport slum rehabilitation programme to find alternative land to relocate and resettle approximately 80,000 slum-dwellers, who have encroached on 276 acres of airport land.
