Jet Airways (P) Ltd.

completed

Over the next five years, Jet proposes to purchase ten new Boeing 737-800''s and take on lease four new Boeing 737-700''s while retiring five existing Boeing 737 leases and selling two Boeing 737s. As a result, by 2005, it would own twenty of its thirty two B737 aircraft and have on lease twelve Boeing 737s and five French-made ATR-72’s. As part of the project, the company also plans to purchase and install a new generation Boeing 737-800 flight simulator and a Boeing 737-400 Flight Training Device. The Canadian-built simulator would enable Jet’s pilots to undergo more rigorous in-house training and significantly cut-down its training costs and dependence on other international airlines. The acquisition of the new generation 737-800’s and 737-700’s is part of Jet’s continued strategy to fly a modern, young fleet with high fuel efficiency, low operating and maintenance costs. With this acquisition, the company would have a range of capacities within the same aircraft family (Boeing 737) enabling it to mix and match its fleet operations to the needs of the varying market segments. The project would further improve Jet''s existing service level, expand services to remote areas of India, force increased competition in the air transport sector in India and bring about greater benefits to the Indian air traveller. Whereever achieved, airline deregulation has led to significant gains from: - better service at lower cost, thus lowering business travel expenses and creating new tourism markets; - better utilization of public facilities like airports and air navigation systems; and - improved service for more remote and low traffic regions through service design improvements.As 90 percent of the airline traffic in India is business related, increased frequencies and wider geographical coverage extending to some of the remote regions of the country would positively impact the overall growth and development of business in these areas. The project is consistent with the World Bank’s strategy in India to promote the growth and development of infrastructure in the country. IFC’s participation in Jet''s fleet expansion, given the government''s announced plans to privatize Indian Airlines, would further encourage private investment in the air transport sector in India and reduce the pressure on scarce public resources in the country. The infusion of quasi-equity by IFC would strengthen Jet’s financial position and prepare the company for tapping the international capital markets for its future needs.