Jet Airways Looks To Save Rs 611.5 Crore With Etihad’s Help

Jet Airways aims to save Rs 611.5 crore by renegotiating contracts with its vendors and suppliers with help from its partner Etihad Airways, which owns 24% stake in Jet.

"Whilst on one hand, the company is upgrading and repositioning itself based on its own operational strengths, on the other hand, it will exploit and capitalise on synergies arising from its alliance with Etihad as a strategic partner,” Jet Airways said in its annual report for FY2013-14.

"Common areas of benefits include joint sourcing of aircraft and equipment, sharing of best practices, co-ordination of flights, leasing of spare aircraft, joint procurement of fuel and other services etc. resulting in cost savings for both the airlines," it added.

Saving costs and smooth synergy with its financially strong partner, Etihad Airways, is critical for Jet to come out of its losses. Jet suffered a record quarterly loss of Rs 2,153.57 crore in the January-March quarter of FY2013-14. Annual loss increased more than fivefold to Rs 4,129.76 crore – equal to the combined yearly losses of the previous six years.

Jet's cost-saving target is in accordance with the recommendations of Seabury, a US consultant it hired to suggest network changes and cost-saving measures.