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Post Info TOPIC: Economic Times:Jet may get nod for Gulf flights
ArtofZen


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Economic Times:Jet may get nod for Gulf flights
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MUMBAI/NEW DELHI: Jet Airways may get permission to start flying to Gulf next year. This follows a review of the policy to reserve flights to the Gulf for Air-India and Indian.

Gulf-based carriers have been expanding in India, and there is a view that the two public sector carriers are not matching this with additional capacity.

Jet’s operations on these high-turnover sectors are likely to impact margins of A-I and Indian. The government had promised these airlines a five-year exclusivity to Gulf, when international operations were permitted for Jet and Sahara. However, there was no written commitment to the effect.

Air Sahara is also likely to get the nod, but it is not clear if it will jump join the fray since it is still recovering from the failed merger with Jet.

Jet is likely to start flying to Gulf cities during ’07. Air-India, Indian and Air India Express currently control over 50% of the India-Gulf traffic.

In the other direction, the market is carved up between Gulf Air, Emirates, Qatar Airways Etihad and Air Arabia. The India-Gulf routes cross-subsidise losses on other domestic operations for Indian. Air-India too makes higher cash margins on the Gulf routes than on the longer haul sectors.

Civil aviation minister Praful Patel told ET: “The aviation industry is witnessing dynamic changes globally. We need to respond to these changes.” Officials said a review of aviation policy would begin in January. The idea of allowing private airlines to fly overseas was to enable strong Indian competition to foreign carriers, they added.

The situation has changed since the time Gulf was reserved for government-owned carriers, they explained. The government’s rethink is partially due to the decision to merge the two PSU airlines.

Post-merger, the government expects to see a strong carrier capable of meeting global competition and this may obviate the need to provide support in terms of exclusivity to the Gulf market.

Originally, the Gulf was to be the exclusive preserve of A-I and Indian till ’08. Then, the government looked at extending this till ’10, since fleet acquisition by the two carriers got delayed.

The current proposal indicates that the entire policy scenario seems to be going through a major churn. Entry into the Gulf market will be a booster for Jet, which is preparing for flights to the US next summer.


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karatecatman


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karatecatman


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Might as well ask Jet to take over AI and IA.

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Nimish


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karatecatman wrote:

Might as well ask Jet to take over AI and IA.

That wouldn't be too bad an option !

Seriously speaking - I don't see any reason to keep the Gulf sectors as monopoly sectors for AI/IC. Especially in the light of all 2 bit players from the gulf being able to launch flights to India as soon as they start up! I'm sure Indian works in the gulf would appreciate flights to the Gulf on LCCs such as DN or Spicejet. 9W might price itself out of the bulk of the market, and may not have the option to feed passengers to the massive networks possible onwards from the Gulf.

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the_380


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Nimish wrote:

That wouldn't be too bad an option !



Bad idea indeed! Who would do the social work then?


Think about "mankind" also.



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Bad news for AI and IC but not for the pax. The competition should either make or break the GOI carriers.


Good news indeed.



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Jaysit


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Its about time.


The Gulf carriers have a steady source of income from the hapless Indian workers who will continue to seek work in the Gulf by the thousands, in spite of all the rubbish trotted out by Sheikh This-and-that about wanting Arabs to fill jobs.  Emirates can afford to start new services to second tier cities in Africa and Europe only because the subcontinent is a goose that lays that perennial golden egg.  If every two-bit emirate can launch an airline with a few A320s and fly to India while Air India and IC look on and shrug, let Indian carriers who have their act together jump into the fray.  We all know how long it takes AI/IC to get anything done, and even with a brand new fleet coming in over the next 5 years (during which time Fujayrah and Al Ain will have launched their own carriers with multiple flights a day to India), you can bet that AI/IC will make a mess of things.  At the end of the day, no amount of brand new 777s and 738-NGs can overcome the power of babu-giri and bahenji-ism.



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