Mumbai, Jan. 21: Jet Airways India Ltd, the country’s largest private airline, is planning to raise $800-850 million from international and/or domestic markets to fund its ambitious expansion programme. The overseas offering may include American Depository Receipts (ADRs), Global Depository Receipts (GDRs) or flotation of foreign currency convertible bonds (FCCBs).

The board of directors of the carrier has given an in-principle approval to the fund- raising proposal.

Jet Airways had earlier announced its intention to come out with an equity or debt issue that may also include a domestic offering.

Speaking to The Telegraph, Saroj Datta, executive director of Jet Airways, said while the board has given an in-principle approval to the flotation, the final details regarding the issue size and the type of the instrument(s) would be decided at a later stage. “Only an in-principle approval has been given. The final modalities will be decided later on. We need to take into account various regulatory requirements,” he added.

Dutta, however, denied that the proceeds from the issue would be used for financing the Air Sahara buyout. He said it would be used to fund the airline’s ambitious fleet expansion programme. “Our chairman (Naresh Goyal) has already mentioned the acquisition would be funded through internal accruals only,” Dutta added.

Poor show

The Jet Airways board also considered the company’s third quarter results today.

The airline reported dismal results for the quarter ended December 31, 2005. Net profit for the three months fell steeply to Rs 61 crore from Rs 129.63 crore in the year-ago period. Jet’s earnings declined despite a growth in total income ? to Rs 1499.03 crore from Rs 1230.90 crore.

Commenting on the results, Datta said, “We achieved a positive result for the quarter despite industry-wide capacity addition that was far in excess of demand growth in the market, higher fuel costs that were not fully mitigated through fare increases and operating losses on our newly launched international routes. However, profitability of our domestic business remains strong with seat factors consistently staying above 70 per cent. Going forward, we want to consolidate our leadership in the domestic market through several innovative and targeted sales and marketing initiatives, while simultaneously progressing towards the break-even point for our international operations.”

Datta added that during October and November last year, close to 1000 flights were cancelled owing to shortage of pilots. The airline could not fully utilise its fleet capacity, the load factor also declined and, more significantly, these developments had a negative impact as it came during the peak season.

According to Jet, though it carried 8 per cent more passengers during the October-December period (it carried 2.38 million passengers during the three months), the seat factor came down to 70.1 per cent against 76.1 per cent.