The standoff between Jet Airways and its pilots is adding to the airline's losses. Raj Sivakumar, Jet's vice-president for revenue management, said the company is losing close to Rs20 crore ($4.5 mn) in revenue daily owing to cancellations and a drop in bookings.
Jet cancelled 186 flights on Tuesday and 194 domestic and 29 international flights on Wednesday. The airline saw a drop of 30% in ticket bookings. Besides the revenue loss, the airline is spending on salaries and overheads without returns. All this may push Jet Airways deeper into the red. The airline lost Rs225.3 crore in the quarter ending June.
Jet's loss could have been other airlines' gain, except that mid-June to mid-September is lean season for aviation. Also, a source said, Jet's low-cost subsidiary JetLite's operations have not been affected, so many passengers have been shifted there.
But an analyst in Mumbai said Jet's flight cancellations would have resulted in 10% higher revenues for other airlines. Of the 24,000 passengers Jet flies daily, only 6-7% cancelled their tickets, he said. The rest were accommodated by Jet itself or other airlines. "This must have boosted the revenues of other airlines by Rs7-8 crore," he said. "The other carriers also cashed in by spiking fares."
The only expense Jet has saved on is the cost of aviation turbine fuel (ATF) as some of its aircraft are grounded. ATF constitutes up to 40% of an airline's operational cost.In the quarter ending June, Jet spent Rs637.5 crore on fuel, or about Rs7 crore daily.
|
|
