Jet to fly in with $400 mn rights issue, expand fleet

Flying high with its recent acquisition of Air Sahara, and decked in its new livery, Jet Airways today announced that it was mulling a $400-million rights issue.

Flying high with its recent acquisition of Air Sahara, and decked in its new livery, Jet Airways today announced that it was mulling a $400-million rights issue.

“We are looking at a $400-million rights issue to fund our expansion plans,” said Jet Airways chairman Naresh Goyal, at an event to showcase the airline’s mint fresh Airbus 330-200 and Boeing 777-300ER. To fund its fleet acquisition plans and other capital projects, Goyal said he expected the same to conclude within four months.

The airline estimates that it would “require something north of $50 million” to turnaround JetLite, as Air Sahara has now been re-christened. “However, we are still evaluating the modalities of the same,” said board member Vic Dungca.

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The airline is also on track with plans to launch a dedicated cargo airline by the year-end. “At the moment we are handling about 6 per cent cargo,” said Goyal. The airline aims to increase revenues from this stream to 10 per cent of revenue in 2007-08. Goyal added “we are in discussion with Lufthansa for the same and expect to make an announcement as soon as the network, facilities, distribution, sales, fall in place.”

Goyal added that Jet Airways is also “hoping to create a cargo hub in Brussels and is in discussion with Belgian authorities” regarding the same. On May 2, Jet Airways had announced Brussels would be the airline’s European hub, as it spreads its network.

The airline will commence flights to the Belgian capital from August 5, connecting Mumbai and Delhi to the US and Canada. Flights from Ahmedabad, Bangalore, and Chennai would follow to destinations including New York, New Jersey, Chicago, Toronto and Los Angeles. Goyal added that they were also in talks with several European carriers to provide quick connections within Europe.

“We are coming out with Vision 2020 statement for aviation,” said Union civil aviation minister, Praful Patel said on the sidelines of the event. This would replace the current aviation policy, and lay down the roadmap for the industry and is likely to be ready in the next couple months. The minister added that the proposal for the Navi Mumbai airport would be sent to the cabinet shortly for approval.