As Jet Airways prepares for re-launching commercial operations later this year, the once iconic full-service carrier (FSC) is working on a strategy aligned with the transformation taking place in the global transportation sector. The airline received Air Operator Certificate (AOC) from the aviation regulator, the Directorate General of Civil Aviation (DGCA) on May 20, allowing it to resume commercial operations.
"Since receiving the AOC, we have further ramped up our efforts towards restarting commercial operations in the July-September quarter of the current calendar year," airline CEO Sanjiv Kapoor told Business Today. "We are focused on some foundational blocks to meet the ambitious targets we have set for ourselves, in line with our vision of building a people-focused airline that is in tune with the current and foreseen realities of the digital age," Kapoor added.
The four 'foundational blocks' the airline is working on include people, aircraft, software and systems, and airport infrastructure. With the senior management team already in place, the airline is now looking at hiring for operational roles to get the best people to run what Kapoor termed "a differentiated product".
An all-Boeing customer earlier, the airline is currently in parley with both the US aircraft manufacturer as well as Europe's Airbus Industries to finalise its aircraft acquisition plans. "We are in final negotiations with the aircraft original equipment makers (OEMs) and will announce our aircraft choice once we have made a decision," informed Kapoor.
Choice of aircraft is one of the most critical decisions to be made by the airline as it will offer guidance on its long-term plans. Recently, Kapoor was in Dublin to open negotiations with aircraft lessors. Industry sources told BT that a decision in this regard is expected in a month.
Another very important aspect of the revived Jet will be its aggressive focus on the digitalisation of operations.
"We are building and setting up robust systems and processes to support operations on the ground and in the air to ensure we run like clockwork, to make sure we pay more than lip-service to the term digital," averred Kapoor.
With carbon emission-related norms around the globe expected to become stringent in the coming years, transportation companies such as airlines are busy scouting for new environment-friendly technologies. India itself would be undertaking carbon mapping of all its airport assets as part of the larger efforts to make the aviation sector carbon-neutral, civil aviation minister Jyotiraditya Scindia said in March.
"Apart from regulations, expectations of ongoing high fuel costs will also likely see transportation companies focus more on deploying technology to partly cushion the effect of higher prices. In a recent research report, we noted that fuel normally accounts for 15-30 per cent of airline operating costs (globally), with the proportion mostly a function of fuel prices," said analyst at S&P Global Ratings, Abhishek Dangra.
In India, aviation turbine fuel (ATF) prices can vary from 25 per cent of total operational costs for a single-engine aircraft to up to 45 per cent for a large passenger jet.
Jet is also taking stock of the infrastructure required at airports on its proposed route network.
Revival a milestone event
Terming Jet Airways as a miracle of the India growth story, one of the world's most influential business thinkers and management gurus, the late CK Prahalad had said at the turn of the millennium that it would burn every other American carrier to the ground once it launched its US operations.
Launched in 1993, Jet ruled the Indian aviation market till the early years of the past decade before enhanced competition from LCCs led to the carrier losing market share. The airline folded up in April 2019 due to a lack of funds.
Under the resolution plan approved by the National Company Law Tribunal (NCLT) the airline's new owners - the Kalrock-Jalan Consortium - intends to repay financial creditors a total of Rs 1,183 crore over five years through a Rs 600-crore investment, sale of Jet's non-aviation assets and cash flows. The All-India Jet Airways' Officers and Staff Association has, however, termed the arrangement as poorly planned.
In response, Kapoor maintained the airline management would abide by the terms of discharge of old liabilities on refunds, recipients and other amounts payable as directed by the NCLT.
"At present, we are more than 200 of us at Jet Airways, of which more than two-thirds are former Jet staff. It does not mean that we are stopping here. On the contrary, for every position that is open, if there is a former Jet employee who is equally qualified and talented as any other candidate, we will prefer to hire the former Jet employee," he said.
Meanwhile, the appellate body National Company Law Appellate Tribunal (NCLAT) has said that the implementation of the consortium's resolution plan for the airline will be contingent on the outcome of its order on a bunch of appeals challenging it. The NCLAT will begin its hearing on July 5.
But with instances of defunct carriers getting a fresh lease of life being rare in the history of commercial aviation, experts have termed Jet's revival as an important development.
"The entity seems to be very serious and committed towards a turnaround plan and its successful transition would also be an important milestone showcasing the effectiveness of the Insolvency & Bankruptcy Code (IBC)," explained associate partner at law firm Link Legal, Neha Singh.
So, under what format will a revived Jet be operating? "We will be a smart full-service carrier, with a two-class cabin configuration, including a business class cabin designed to global standards, and an evolved economy class that offers digital-age customers what they value most," emphasised Kapoor.
The true measure of Jet's revival will, however, hinge on its successfully restoring the 'Joy of flying' - as its slogan once asserted - back into the Indian skies.
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