Date:03/02/2008 URL: http://www.thehindubusinessline.com/2008/02/03/stories/2008020351270500.htm

Jet Chairman denies talks on stake buy in SriLankan

Our Bureau

Chennai, Feb. 2 The Chairman of Jet Airways, Mr Naresh Goyal, stonewalled questions on whether or not he would like to pick up Emirates’ stake in SriLankan Airlines. “We have not discussed it,” he said.

Asked if that meant that the airline was not interested in SriLankan, Mr Goyal said, “We have enough on our plate. I am not saying we are not interested. I don’t know because we have not discussed it.” He also denied rumours that Jet was interested in taking over British Midland Airways Ltd. “We have not discussed anything with either SriLankan or BMI.” .

In the last ten years, Emirates has been running SriLankan under a management contract. The contract is coming to an end in March and is not likely to be renewed. Sources in the industry have it that Emirates has been offering its 43.5 per cent stake in SriLankan to various Indian airlines.

Mr Goyal was here for delivering the Dr Neelkantan Memorial Lecture on the occasion of the 59th Annual General Meeting of the Aeronautical Society of India.

Speaking to journalists on the sidelines of the meeting, Mr Goyal said Jet enjoyed over 95 per cent load on its premier class on the Chennai-Brussels route. “People are moving from foreign airlines to Jet." He said that Jet was looking at setting up hotels in Brussels, San Fransisco and New York.

In his lecture, Mr Goyal blamed the competition for “irrational pricing policies, often charging fares that do not cover costs,” for the losses the entire civil aviation industry was making. Pointing out that the industry’s losses amounted to Rs 2,000 crore in 2006-07, he decried attempts to “gain market share at any cost, providing excess capacity and offering unsustainable pay and allowance packages to personnel, all leading to unachievable break-even load factors.”

After dwelling at length on the problems of high levels of taxes on aviation fuel and infrastructure constraints at airports, Mr Goyal also drew attention to a few “less talked-about issues”. “Ground facilities for handling air cargo at airports are pathetic, if not non-existent.” (Incidentally, Jet Airways has said it would set up a new company for cargo operations in 2008.)

He also stressed on the need to provide adequate access to airports from cities and called for a review of security procedures at airports. He noted that many agencies, including the airlines themselves, were responsible for security services at airports, “thereby creating a requirement for a larger than necessary deployment of personnel and duplication of work.”