Jet Airways To Revamp Business Strategy Post Sale To Etihad

India’s Jet Airways has announced a new three-year plan aimed at returning its operations to profitability post the sale of a 24 per cent stake to Abu Dhabi carrier Etihad.

Under the new plan, focus areas for Jet Airways will include widening its network with new services to markets such as Europe, China, Australia and South East Asia.

The airline will also expand frequencies on its existing routes and sign additional codeshares helping improve connectivity across India and worldwide, it said in a statement.

Jet Airways fleet will also undergo a change with the enhancement of its three and two class aircraft product while the seat count will be increased on wide body Boeing 777 and Airbus A330 aircraft.

The airline also said that it has worked to clean up its balance sheet and list its overvalued non-cash assets.

“Our international operations are already profitable and contribute 45 per cent to our total revenue,” said Naresh Goyal, chairman of Jet Airways.

“We will continue to build on this strong foundation as part of our three-year turnaround plan and increase the contribution to 63 per cent by 2015.

“At the same time, we will address challenges in the domestic market with a model that removes complexity in our fleet, product and brand. This is not a short-term strategy, but we are optimistic about the future and confident about achieving the intended results.”

He added that “tough measures” were needed in the Indian market, which is plagued by volatile fuel prices and difficult economic climate to ensure that Jet Airways maximise its partnership with Etihad in the long term.

Earlier this year, Etihad completed the acquisition of a 24 per cent minority stake in Jet Airways for $379 million, becoming the first foreign carrier to invest in an Indian airline after the country relaxed foreign ownership rules last year.

Post its acquisition of a stake in Jet, Etihad operates more international flights from India than any other airline. The Abu Dhabi carrier operates 112 flights per week to 10 Indian destinations.

More than 621,000 people travelled on Etihad’s India services during the first half of 2014, up 51 per cent compared to the same period last year.

“India represents a considerable opportunity for airlines worldwide, with more than 42 million international travellers reported last year and impressive future growth rates predicted by IATA,” said James Hogan, president and chief executive officer of Etihad Airways.

“The challenge is ensuring that our industry is efficiently catering to rising demand, not only in India’s major destinations, but also smaller cities that remain largely unconnected and underserved.”