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Etihad seeks to boost partner Jet Airways, create profit by 2017

Etihad seeks to boost partner Jet Airways, create profit by 2017
Etihad Airways said it expects to make its equity partner India’s Jet Airways profitable by 2017, reported The National.

The plan is to reduce losses next year and consolidate the enterprise in 2016, Jet Airways’ chief executive-designate Cramer Ball told a joint press conference in New Delhi to formally announce the partnership.

“More seats through improved use of capacity, and increased load factor from 77.6% [this year] to 79%” would be some of the key highlights to turning it around, Mr Ball said, reported The National, highlighting that the strategy for Jet’s turnaround also includes restructuring debt, selling or leasing back surplus aircraft, and improved frequencies between India and Abu Dhabi. It will also keep its fleet light and product classes to two – business and economy, and reduce liabilities.

“We have no exit strategy from Jet, we are here to stay,” said Etihad president and CEO James Hogan, adding that “The investment is there, the game plan is in place, now it’s about delivering.”

Jet reported a loss of $689 million for the financial year (FY) ending March 2014 while its consolidated loss stood at $1.77 billion for the same period.

It is worth noting that the domestic operations of Jet, which accounts for a majority of the losses, will also go through restructuring, Mr. Ball noted.

Etihad is also expected to support Jet in borrowing $150 million through HSBC.