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Aviation industry headed for a crisis: Jet chief

BERLIN: With petrol prices expected to cross $200 per barrel in the near future, Jet Airways chief Naresh Goel said the aviation industry was headed for a deep crisis due to price wars among airlines, at home and abroad.

“These irrational policies are bad for banks, manufacturers and shareholders. We are all in trouble. We don’t have a regulator and the situation is very very bad,” he said ahead of taking delivery of an Airbus in the presence of German Chancellor Angela Merkel, Defence Minister A. K. Antony and Airbus Chief Executive Officer Tom Enders.

Mr. Goel said that undeterred by the losses, Jet was looking at expanding its operations on a number of sectors. “We are looking at Milan. We are looking for places in Germany,” he said, adding that unless sanity was restored and everybody started looking at the bottomline, the situation was going to worsen.

The Jet chief felt that acquisitions in such market conditions were inevitable. At the same time, he pointed out that mergers were part of the market process. “We went for Sahara. And this does not happen here alone. It takes place in banks, insurance etc. As a company we are conservative in our approach,” he said.

“India has tremendous growth but we are here to make money. Hopefully operations will stabilise,” he said. “The aviation industry has to raise the fares as and when the hikes come. I am not in a business where I should only look for capacity. At the end of the day, I will have to work to give profits to my shareholders.”

Mr. Goyal said he was not looking to adding the largest airliner A-380 to his fleet. The company’s strategy was to fly in planes with more frequency. But he was seriously examining the possibility of acquiring Airbus’ A-380 XWB (extra wide body) which will be inducted from 2013. “We don’t place orders just for the sake of it. For us, frequency is important,” he said.

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