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Jet to be worst hit by US downgrade

The downgrade of India's aviation safety rating by the US Federal Aviation Administration (FAA) is likely to impact Naresh Goyal-led Jet Airways the most, a report by aviation consultancy firm Centre for Asia Pacific Aviation has said.

business Updated: Mar 04, 2014 01:38 IST
HT Correspondent

The downgrade of India's aviation safety rating by the US Federal Aviation Administration (FAA) is likely to impact Naresh Goyal-led Jet Airways the most, a report by aviation consultancy firm Centre for Asia Pacific Aviation has said.

Jet, India's largest publicly listed airline, will have to rethink its network expansion plans now, the Capa report said.

On January 31, FAA — the American aviation regulator — downgraded India's aviation safety rating citing a lack of safety oversight. India was put in Category 2 list joining the ranks of Ghana, Curacao, Serbia and Bangladesh, and ranked below Pakistan. A Category 2 rating implies an assessment that India's safety oversight regime does not meet international safety standards.

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As a result of the downgrade, carriers like Air India (AI) and Jet Airways cannot increase flights to that country nor have new code-shares with American carriers.

Capa said that following the acquisition of a 24% stake in Jet Airways by Etihad, Jet was in the process of restructuring and expanding its US route network. Jet, the report said, had announced plans to launch services to New York and Chicago later in the year.

"Neither of these new routes can proceed using Jet Airways metal (aircraft) in light of the downgrade. Though Jet operates a single daily service to the US at present, this market was an important part of the carrier's network expansion plans," it said.

Jet did not respond to an email from HT.

Capa also said AI's expected entry into Star Alliance was unlikely to be impacted as global alliances have earlier accepted members from Category 2 nations.