Jet Does not See Big Revenue Fall Due to U.S. Downgrade
February 11, 2014 3:05 PM EST
Jet Airways (JET.NS), the country's No.2 carrier by domestic market share, said on Monday it did not expect a big fall in revenue due to a recent rating downgrade of India's aviation safety by the United States.
A Jet Airways passenger plane (Reuters)
Jet, which sold a 24 percent stake to Abu Dhabi's Etihad last year, is replanning its U.S. strategy after the downgrade, a senior company executive told analysts on a conference call. The airline posted a $43 million net loss for the December-quarter on Friday, its fourth straight quarterly loss.
The U.S. Federal Aviation Administration downgraded India's safety rating to Category 2 on January 31, meaning Jet and state-run Air India, the only two Indian carriers flying to the United States, cannot increase flights.
United Airlines (UAL.N), which had a code-share pact with Jet, said it was suspending placing its code on Jet flights effective February 1, following the downgrade. Jet currently operates seven flights a week to the United States.
"However, there is no restriction on Jet Airways placing its code on any U.S. carrier's flight, including United. So, we do not expect a big reduction in revenue because of this downgrade," Raj Sivakumar, senior vice-president of alliances and planning at Jet, said on the conference call.
"We are in the midst of replanning our strategy of offering consumers viable options into the United States over the coming days and weeks," Sivakumar said, without elaborating. He was replying to a question on whether Jet would use Etihad's network to add more flights to the United States.
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