Jet Airways expects shakeout in domestic industry

Jet Airways today said the domestic aviation industry would soon witness a shakeout, but hoped that the country's largest private airline would come out of it unscathed. "Nobody wants to lose on a continuous basis so much money, either some airlines will close down or capacity induction will slow down. We are in a special phase and there will be a shakeout," Jet Airways CEO Wolfgang Prock-Shauer said.

Admitting that stiff competition in the domestic market had led to a decline in the load factor in the first half of the year, he said, everybody was fighting for the whole industry load of 500 million. Stiff competition from the growing number of private operators as well as its own ambitious international expansion plans coupled with the high fuel price had resulted in a Rs 100 crore loss for Jet Airways in the first half of 2006-07, against Rs 164 crore net profit during the same period last year.

Prock-Shauer said that fuel cost and lower load factor were equally responsible for the losses in the first half, but things had started to look up. "We are seeing light at the end of the tunnel. There are some encouraging indications. Fuel prices have come down and we also moving into peak season," he said, adding, "I don't want to be too optimistic, but we are moving to break-even position and it will get better if the market grows.

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