A Jet Airways aircraft at Mumbai international airport (Photographer: Dhiraj Singh/Bloomberg)

Jet Airways May Bid For Second Round Of UDAN Scheme

  • Jet Airways’ participation in the second phase of bidding for UDAN’s regional scheme depends on the “economics” of operations.
  • The winners for this bidding are to be announced by November-end.
  • Jet Airways had no plans to opt out of any routes between India and the Gulf, CFO said.

Naresh Goyal-owned Jet Airways Ltd. may participate in the second phase of bidding for regional flights under the central government’s UDAN scheme, but the final decision will depend on the “economics” of operations.

The second round of the bidding for RCS routes had commenced on August 24, and the winners for this phase are to be announced by November-end.

“We evaluate this (participation in UDAN scheme) consistently. We would evaluate and depending on the economics available, we will decide on the second round of bidding,” Jet Airways Chief Financial Officer Amit Agarwal said during during a post-earnings analysts call in Mumbai.

Significantly, airline chairman Naresh Goyal had, at the company’s 25th annual shareholdersmeeting this week, said that aviation and connectivity nationwide is expected to witness further impetus due to the Government's Regional Connectivity Scheme.

Goyal’s Jet Airways, along with budget carrier IndiGo and a few other domestic carriers, had not bid for the first round of the scheme, in which five air operators, including Air India and SpiceJet, have been mandated to fly on 128 regional routes, connecting 70 unserved and underserved airports.

During the analyst call, Agarwal also said that Jet Airways had no plans to opt out of any routes between India and the Gulf, despite the persisting “weakness” in the markets there.

The short-term optimisation is not the right thing, but we continue to optimise continuously,” he added.
Amit Agarwal, CFO, Jet Airways

“The weakness in the Gulf market, which accounts for 20 percent of the airline’s total international capacity, continues...There is no one specific route that we would like to take out at this juncture, because we continue to evaluate all routes at all points of time and depending on the full year structure on pulling out a route or not,” he added.

Agarwal also said that the airline is open to deploy a wide-body aircraft on a route, which is currently being catered by a narrow body and an ATR operations could be converted into a bigger single-aisle plane, depending upon the demand on that particular route.

Also Read: Jet Airways Said to Be in Talks to Buy 50 Single-Aisle Jets

Jet Airways has phased out more that Rs 2,700 crore debt from its books, which currently stands at Rs 8,000 crore, and shaving it off further will remain a focus area for the airline.

"This (reducing debt) clearly reflects that the cash flow generation as well as improvement in finding ways to reduce the debt has been the focus and will continue to be the focus," he said.

He, however, said that the debt from the books can't be wiped off overnight and that "the focus continues to be that will take all the cash flow generation and deploy it towards de-leveraging and reducing debt on the balance sheet."

Also Read: Jet Airways’ Profit More Than Doubles But Margins Hurt By Higher Fuel Costs

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