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factor to 68.7% which increased yields.Cost-saving initiatives and lower fuel costsmade up the rest of the equation. For the firsttime, international operations came close tobreak-even.Overcapacity has been a particularissue in India as an array of young airlinesintroduced large numbers of new aircraftinto the fast-expanding domestic market.Last year, fleets increased by 45%. “Weare not out of the woods yet, but we seecapacity induction slowing down,” saidProck-Schauer.Importantly, that should also reduce thelevel of ticket discounting that has batteredairline profitability, leading in part tocombined losses by Indian carriers last yearof $400 million.Coupled with this, Jet is driving aheadwith moves to bring down its overheads,renegotiate contracts and improve assetutilization. At the same time, it is trying toreduce distribution costs by increasing directonline bookings from the current 8% to 25%,saving up to $10 on each ticket.But it is on the international front thatthe airline will see the most significant shiftin emphasis in the next few years and itsnew aircraft purchases underline that fact.Austrian-born Prock-Schauer, who took overat the helm in June, 2003, said the B777 waschosen because it was optimized for longerroutes of up to 14 hours, the A330 for flightsof 10 hours and below.“The B777 will be focused on the UKand North American routes and the A330on regional Asian routes, Africa and thinnerEuropean routes. From the beginning of2008, when current government policy willallow us, we should also be flying to the Gulfregion,” he said.Jet currently has a modest offshorenetwork. It flies to Colombo, Kathmandu,Singapore, Kuala Lumpur, Bangkok andLondon. That will begin changing in Augustwith the launch of flights from Mumbai toBrussels and on to New York. This will befollowed later in the year by a Mumbai-Shanghai-San Francisco service, as well asa flight to Toronto via a point in Europe.Prock-Schauer made it clear that Jet’splan is not simply to add destinations for thesake of rapid network expansion. “Londonis our only European destination at themoment. We have a strategy that, wheneverwe fly to a destination, we want to offer highfrequency,” he said. “Right now we havefour flights a day into London Heathrow;two daily from Mumbai, one from Delhiand one from Amritsar.“When we started we wanted to firstestablish a critical mass and we have nowdone that at Heathrow. The next step is toopen a second destination in Europe, whichis Brussels.“There we are tying up with local carrierSN Brussels, to give us good feed and toconnect to other European cities throughtheir flights.”More European destinations are likely tofollow. Jet is evaluating Germany, France,Switzerland and northern Italy.Two other areas are high on its list ofnetwork priorities: the Gulf region andChina.“Traffic between India and the Gulf ishuge. Some four million Indians are livingthere and these people tend to come homeonce or twice a year,” said Prock-Schauer.Growing economic links between Indiaand China also excite Prock-Schauer. Airtraffic between the two is light but, with theHimalayas getting in the way of land links,expanded air connections make a great dealof sense.“What we see now is tremendous growth.The whole relationship between India andChina is changing rapidly,” he said. “There ismuch more interaction, trade and tourism, soI see big potential in air traffic growth. Thatis the reason we want to start flights throughto China this year with a continuation to SanFrancisco.”‘What we see now is tremendousgrowth. The whole relationshipbetween India and China ischanging rapidly.’Wolfgang Prock-SchauerProck-Schauer believes Jet’s majorchallenge looking forward is to achievegood profit margins.“You have to keep your costs undercontrol, despite the fact there is a lot ofupward pressure on costs because ofthe scarcity of personnel, such as pilots,engineers and other professionals,” he said.“Managing the expansion is anotherbig challenge because we are growingsystem-wide, at 35-40% annually. Youhave to manage that and achieve profitablegrowth.”However, he believes Jet is wellpositioned, particularly in terms of trainingthe personnel it needs.“We can train all categories. We havetwo B737 simulators and we are getting twomore, one a B777 and the other an A330,” heJet Airways: China routes this year?said. “We can generate 150 pilots annuallyon our own. We can train technicians andmaintenance people as well as cabin crew.The airline which has all the infrastructureneeded to provide those personnel will havea huge competitive advantage.”With nine domestic car riers nowoperating and most losing money, Prock-Schauer doesn’t believe everyone willsurvive.“The question will be: who is best fundedand who is best managed? These are theairlines that will survive. The others will goout of business,” he said.He is certain that Jet Airways will notbe one of the casualties. “We have seen inthe last quarter that we really can achieve aprofit,” he said.“I think we are best positioned with thenetwork strength, the established customersand product quality we have, to move forwardand achieve our plans.”MARCH 2007 ORIENT AVIATION INDIA 11