The Hindu Business Line : Jet Air may invest $8 m initially in its cargo airline

Weighing options
The airline will finalise investments once it decides on the routes.
Mumbai-HK and Delhi-HK look attractive to Jet despite competition on these routes.

Shubhra Tandon

Mumbai, Jan 25 Jet Airways is likely to invest $8-10 million in its cargo airline as an initial sum once it finalises most formalities including a partner for its dedicated freighter airline by June 2008. The Chairman, Mr Naresh Goyal, has earlier indicated that Jet’s cargo airline should commence operations by end-2008.

The investment would come in once the airline decides on the routes, Mr Jay B. Shelat, Vice-President Cargo, told Business Line on the sidelines of a two-day Air Cargo India conference organised by STAT Times, a transport and tourism journal. While converted aircraft from passenger to freighter seems a preferable mode, it would be open to leasing out new freighters too and then accordingly decide further investments, he said.

Jet is yet to come up with its $400 million rights issue which would fund its fleet expansion plans and its last year’s acquisition of Air Sahara.

Currently, the Indian private carrier makes use of the belly space in its passenger aircraft for cargo activity. Jet is lifting around 150 tonnes of cargo per day through its fleet of Boeing 777s and Airbus 330s, which contributes around eight per cent to Jet’s bottomline worth about $149 million per annum, he said.

Mr Shelat refused to confirm whether German carrier Lufthansa would be its preferred partner for the upcoming venture. “We are in discussion with many carriers and Lufthansa is just one of them.” Media reports suggesting a possible alliance between the two carriers have been doing rounds for quite some time.

The airline is studying various markets such as the US, Europe, West Asia and China for launching its cargo operations Mr Shelat said.

While it sees opportunity for cargo activity on its shortly commencing Mumbai-Shanghai-San Francisco passenger route, the airline would just study the US market as of now, as not much cargo comes to India from there, he said.

Mumbai-Hong Kong and Delhi-Hong Kong are other attractive routes for Jet. The company is upbeat about its cargo prospects, despite competition on these routes from Air India, which deploys a freighter Airbus 310 (converted from passenger aircraft) on the Hong Kong and Singapore routes.

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