Jet Airways international fleet and network operations analysis

A recent report from Flightglobal quoted Boeing Asia head Dinesh Keskar as saying that India’s largest full service carrier, Jet Airways, could potentially convert existing order into the larger Boeing 787-9 variant. Jet Airways currently has 10 Boeing 787-8s on order for delivery from 2014 onwards, but Mr. Keskar said, “”If they do that [convert orders to the 787-9], there will be a delay. The -9s, however, have better economics for them, so now they are looking at their portfolio.”

Interestingly, the move would parallel Jet Airways’ recent fleet planning decision to shift away from the smaller A330-200 to its larger cousin the A330-300. Part of the impetus behind the decision was certainly the competition from Jet’s largest Gulf and Asian rivals. Most of these carriers operate not only the A330-300, but also the Boeing 777-300ER, both of which blow the A330-200 out of the water in terms of unit costs on regional routes. Especially as Jet consolidates around the core long haul routes in New York, Toronto, and London, all of which face severe competition from a myriad of airlines around the world. In response to this heightened state of competition, Jet made the correct choice in opting for a larger variant.

The same principle applies to the 787-8 versus the 787-9. While the smaller 787-8 (seating around 220 passengers) was the first 787 variant to come out, most industry analysts (including Bangalore Aviation) feel that the 787-9 will have much better operating economics, as the airframe is actually more optimized for aerodynamic driven fuel efficiency and has lower seat-kilometer costs thanks to its larger seating capacity. Furthermore, Boeing’s current projections for the ranges of the two aircraft show the 787-9 to have a range of 8,000 – 8,500 nautical miles (9,210 – 9,780 miles), which would allow Jet to operate most, if not all, US-India route pairs nonstop, including routes as long as Mumbai and Bangalore to the US west coast. Bangalore-San Francisco nonstop would be a gold mine to whichever carrier launched it first, and given that Air India only has 787-8s and that United will only receive 14 787-9s (many of which will likely be used to retire aging Boeing 777-200 non-ERs), Jet could conceivably be the first airline to launch onto this important route.

* The range figures for the 787-9 are quoted from sources within the industry

Currently, as per the Jet Airways fleet matrix, beyond the 787s, Jet has 3 A330-300s on order (the A330-300s start service on 23rd December) with 1 already having joined the fleet, 10 operational A330-200s with 5 outstanding orders, and 5 operational Boeing 777-300ERs with 5 aircrafts leased out to Thai Airways International. With the understanding that any *new* (beyond the initial 10) 787 orders would not be delivered till around 2018 at the earliest, the following is my suggestion for Jet Airways’ widebody fleet plan moving forward.

Immediately switch the 787-8 order to 787-9s and trade delivery slots with other airlines wherever possible to ensure delivery of these aircraft between 2015 and 2018. Order 15 further 787-8s for delivery 2018 onwards as well as 15 more 787-9s for delivery in the same timeframe. Of the current A330-200 orders, convert all 5 to A330-300s and cancel one order to create a fleet of 8 A330-300s, with the last 6 being the recently upgraded A330-300 with higher gross weight and range. Keep the current 5 777-300ERs as is, and reconfigure the 5 777-300ERs currently at Thai Airways into a 2-class configuration when they are returned (aim for 349 seats in a 2 class configuration – similar to Air Canada).

*These plans imply that Jet Airways will use Mumbai as an international connecting hub moving forward, made possible in part by the new integrated terminal.

Following this shift, the A330-200 would be used on European flights (excluding Heathrow) from Mumbai (Brussels-Chicago, as well as Paris, Frankfurt, and Munich – the latter two assume Jet’s entry into Star Alliance), Delhi (Brussels – Toronto), Bangalore, and Chennai (both to Munich), as well as on Delhi-Hong Kong-Manila, Mumbai – Seoul, and potentially Bangalore-Narita. Longer term, the 787-8s would replace the A330-200s one to one, converting the Delhi-Toronto and Mumbai-Chicago legs to nonstop flights.

The A330-300s would be used primarily on regional and VFR heavy routes. Mumbai-Brussels-Newark would continue in the very near term. Additionally, Mumbai/Delhi – Beijing, Mumbai – Tokyo-Narita, Mumbai – Jakarta, and Mumbai -Shanghai could be launched with the A330-300s, as well as Mumbai-Nairobi, Mumbai-Cairo, and both Mumbai-Dubai flights. Longer term, 787-9s would be used to replace the A330-300s on a one-to-one basis after all of the 777-300ERs have been replaced.

The 5 777-300ERs currently in the fleet would be deployed onto the two daily flights between Mumbai and London-Heathrow, as well as the daily Delhi – London-Heathrow. Mumbai – Hong Kong would remain as an 777-300ER service, with potential extension to Taipei since the aircraft is required to spend almost 8 hours in Hong Kong anyway for commercially viable timings. And Mumbai-Singapore could be converted to 777-300ER for the night flight, leaving one aircraft for spare.

The remaining 5 777-300ERs would be reconfigured into 349 seat configuration without first class, thus allowing the aircraft to fly India-US nonstop. Two aircraft would be deployed onto the Mumbai-Newark sector nonstop (in partnership with United through a potential JV after joining Star Alliance), while two more aircraft would ply Mumbai – Boston nonstop 3 weekly, and Mumbai- New York JFK 4 times per week. The final aircraft would be used to run thrice weekly flights Mumbai-Sydney-Auckland.

All of these 777-300ERs would be replaced with the first batch of 787-9s. The first 5 aircraft would be configured in 3 class configuration as a subfleet, while the remaining 20 787-9s would be configured in 2 class configuration for 1 to 1 replacements and growth.

All of this would leave Jet Airways with a standardized widebody fleet of 40 Boeing 787s, 28 for replacement, and 12 for growth. The standardized fleet would help save money on maintenance and training (the so-called “commonality” effect) and if necessary, Jet could even order the larger 787-10 to replace some A330-300s and 777-300ERs if demand conditions warrant such an action.

All of the above is an idealized scenario based on several assumptions, but it represents the kind of strategic thinking one should expect from Jet. However, it is also possible that Jet Airways simply wants to delay the acquisition of aircraft due to a funds constraint, in which case the delayed timeline of the 787-9 would offer Jet more time.