Jet Airways 2.0 likely to fly by September-end: CEO Kapoor

How is your fleet plan?

Our fleet will be leased for at least the initial year or so. However, there is ample availability of aircraft from both new and old leases. There are a lot of planes we can consider. We will decide what is best for us considering our needs and cost benefits. I don’t want to give an exact number, but we know it’s important to reach a certain scale early because it’s a very large scale driven business. Of course, when we order aircraft, it will be for modern and fuel-saving aircraft.

Will you be looking at a single fleet or a mixed fleet?

We are starting with domestic operations. So, it is safe to assume that we will start with a single fleet (aircraft).

Your tweets suggest that there will be a hybrid model of Jet Airways 2.0. can you elaborate?

There seems to be a lot of misconceptions about hybrid models. That doesn’t mean it’s going to be no-frills. By hybrid, we mean a model that is not the traditional FSC model, which has outlived its usefulness. Almost all FSCs operate a hybrid model. We intend to create a product that is in sync with the needs of the current customers and also reflects the changing preferences of the customers. Shopping only on board, or not eating out isn’t the only definition of a hybrid.

Has Jet Airways 2.0 resolved the slot related issues at Mumbai and Delhi airports?

I was not involved in the NCLT process. But, my belief and hope is that as we move forward, we will find the right places.

Is this the right time for a new airline to enter the market?

The simple answer is that timing an airline’s entry is like buying a stock. For every buyer of a stock, there are sellers and people placing opposite bets. But, on a serious note, if the investor, anyone who is entering the market, is able to enter the low, they can time the move for the high. Markets and businesses appear to be cyclical for a variety of reasons. We hope that our time will work in our favor.

How do you plan to keep your costs under control, something that Jet Airways was unable to do before it was shut down in 2019?

While fuel costs are not under our control, other costs that can really determine competitive advantage or failure are the costs of larger contracts that we will enter. These are not only aircraft maintenance, and engine maintenance contracts but also other contracts such as IT, ground handling, external service provider contracts, call center contracts, delivery costs, etc. Each of these costs has to be controlled.

What about funding from promoters?

We have significant funding from new promoters. The new promoters have been given a liability of $60 million (as part of the NCLT process), which has been worked out. Our promoters have committed $180 million for initial funding. Of this, $120 million will be used to fund the airline, which is actually quite a significant amount. And it does not include SLB (Proceeds from the sale and leaseback of aircraft). On top of the promoter funding we will have access to SLB cash flows over time. We also have assets of old Jet Airways which can be sold to raise funds.

What are your plans with the old Jet Airways planes?

What is left of the fleet is wide-body aircraft, which we will not use any time soon as we restart as a domestic airline. Some narrow bodies are left, which are old. Therefore, it is unlikely that we will use them.

What are your plans for International?

We need to fly 20 aircraft on domestic routes before applying for international flights. So, when we reach 20 planes, we intend to apply for international flights.

Are you preparing for a rent war when you enter the market?

Price is a factor of demand and supply. We have plans and ideas that will allow us to differentiate ourselves from the competition and hopefully allow us to fly passengers.