Jet Airways' promoter Naresh Goyal changes stand, open to FDI in aviation.

BEIJING: Naresh Goyal, promoter of Jet Airways, India's largest airline by market share, is not enthused by the recent government move to allow direct import of airline turbine fuel but said he is open to "any policy initiative" the government undertakes on allowing foreign direct investment in civil aviation, a shift from his earlier position.

Jet, aviation industry officials say, stands to gain from the current crisis gripping the aviation industry in India, particularly the travails of Kingfisher Airlines and state-owned Air India. It has a market share of 28.2% for May this year and while its share has not increased significantly so far - Indigo and SpiceJet are the gainers - it is likely to benefit in the medium term from the hardening of airfares.

But, like all other airlines, Jet is struggling to make money because of interest costs and high taxes. The airline reported a loss of Rs 298 crore in the fourth quarter 2012, as it has been hit by a depreciating rupee and volatile prices. It has debt burden of Rs 13,100 crore compared with a market capitalisation of Rs 3,072 crore. The company had a top line of Rs 14,816 crore for the year ended March 31, 2012, while notching up a loss of Rs 1,236 crore.

In an interview on the sidelines of the International Air Transport Association (IATA), a Geneva-based grouping of some 240 airlines who have gathered for an annual summit in Beijing, Goyal said he did not have the infrastructure to import ATF. "Direct ATF import is of no use and we are not considering it. When you don't have the infrastructure to do so, it can't be of any use," he said. SpiceJet and Air India, India's third and fourth largest by domestic market share, respectively, are considering imports. Breaking his silence on his interest in joining global airline groupings, Goyal admitted that he is in talks with both Star Alliance and Sky Team.

Jet is keen to diversify its routes to include more European destinations at a time Air India is struggling to keep its planes flying as a strike by its pilots enters the second month. "We want to go to a few places in Europe and we are looking at those destinations which will make money like Paris, Munich and Frankfurt to name a few. We still want to go beyond India," Goyal declared.

"We are planning to induct four more A330-300 aircraft by early part of the next fiscal for this purpose," he said.

Goyal bemoaned what he described as the lack of state support for Indian carriers compared to that of China. "They (Chinese carriers) are all state-owned and have solid government backing, not from now but for a very long time. The Chinese government doesn't tax their own carriers and there is a lot of state support to them," he claimed. "

India is the only country in the world to impose a service tax on its airlines. Do you know that the fares of Chinese airlines are a third of the Indian carriers? Why is it so? Because there are no taxes here. In fact, the Indian fares are higher by 200-300% as compared to other carriers," he said.

Source : economictimes.indiatimes.com