Fly Them Like Gods; 'Why can't Indians run airlines? It's not rocket science, it's a hospitality business.'.(Jet Airways)(Interview)

Byline: Vibhuti Patel

India is rising. and as rising nations are wont to do, it is launching airlines on global routes in pursuit of money and international glamour. The Indian entrants in this brutal market are led by Jet Airways, which begins to fly from major North American cities to Europe, Africa, China, the Middle East and to its home bases in India on Aug. 5. Chairman Naresh Goyal, who started his career as a ticket agent, founded Jet in 1993, when India began opening up its air market. Jet was India's first private domestic carrier, and is now the country's largest private airline. Goyal, one of India's 10 richest people, spoke to NEWSWEEK's Vibhuti Patel in New York about Jet's $3.7 billion expansion and the global airline business. Excerpts:

PATEL: Why are you entering the international market now, just as airlines are struggling with high fuel costs?

GOYAL: Very few airlines make money. Indian carriers' share is only 20 percent of our captive market; 80 percent of the traffic into and out of India goes to foreign airlines because of their reputation. Nearly 30 million Indians live overseas, all doing very well. If Indians can run other businesses, why not airlines? It's not rocket science, it's a hospitality business. Indians are raised to treat the guest as god; that's our culture. Our cost in India is lower than elsewhere, our productivity is higher than most, so if we provide leadership, Indians shine. Jet Airways has made money continuously since its inception.

It's been said that you overpaid for domestic carrier Sahara to wipe out the competition.

We did not overpay--there can be no deal if it's not fair to both parties. When we bought Sahara in 2006, we looked at how TWA sold to American, Pan Am to United; we studied what assets were transferred. We were expecting that policy to come from our government and hoped to get everything--infrastructure, hangars, airport facilities--but the government did not do that. We had put $500 million in escrow. When we did not get the conditions we were expecting, we went to court and then into arbitration. Last year India's domestic airlines lost $500 million--a lot of money for a small aviation sector--so the valuation of Sahara fell by 40 percent. We could afford that. It was a win-win situation for both companies.

Will you take that approach abroad?