Soaring fuel prices affect Jet Airways’ results for Q4 FY’08;
Revenues up 37% YoY, International revenues now 42% of total.

Highlights for quarter ended March 31, 2008 vs. March 31, 2007

Operational

• System-wide ASKMs of 7,684 million, up 64.2%  
• System-wide RPKMs of 5,452 million, up 60.5%
• System wide seat factor of 70.9% vs 72.6% 
• 3.17 million revenue passengers carried up 17% 

Financial

• Revenue of Rs. 27,270 million (US$ 679.7 million), up 37.1%
• Loss before tax Rs. 3,742 million (US$ 93.3 million) vs profit of Rs. 1,215 million (US$ 27.9 million)
• Loss after tax of Rs. 2,212 million (US$ 55.1 million) vs profit of Rs. 880 million (US$ 20.3 million)
   Exchange rate used 1 USD = INR 40.12

Highlights for year ended March 31, 2008 vs. March 31, 2007

Operational

• System-wide ASKMs of 24,447 million, up 38.1%  
• System-wide RPKMs of 16,914 million, up 37.4%
• System wide seat factor of 69.2% vs 69.5% 
• 11.43 million revenue passengers carried up 6.5% 

Financial

• Revenue of Rs. 94,815 million (US $ 2,363.3 million), up 28.1%
• EBITDAR of Rs. 7,508 million (US $ 187.1 million), down by 25.5%
• Loss before tax Rs. 4,126 million (US $ 102.8 million) vs profit of Rs. 514 million (US $ 11.8 million)
• Loss after tax of Rs. 2,531 million (US $ 63.1million) vs profit of Rs.280 million (US $ 6.4 million)

 Exchange rate used 1 USD = INR 40.12

Management Discussion and Analysis (quarter)

Domestic operations

Domestic operations accounted for 58% of operating revenues (Rs. 16,001 million US $ 398.8 million) as compared to 76.3 % (or Rs. 15,094 million, US $ 347.23) in the fourth quarter of last year, reflecting the growing contribution of the Company’s international operations to total revenues.

The Company achieved a domestic seat factor of 74.0% in the quarter ended March 2008 versus 70.3% in the same period a year ago.
 
The ratio of our full-fare to discounted fare was approximately 25:75; yields (Incl YQ) have increased by 2.9% YoY for Domestic operations.

The Company recorded a pre-tax loss on domestic operations of Rs.1,108 million (US $ 27.6 million) versus a profit of Rs. 1,183 million (US $ 27.2 million) in the same period a year ago.

The key factors driving the domestic performance in the fourth quarter included:

Rising fuel prices and Slowdown in demand in the domestic market

• Over the past few months, the aviation industry worldwide has been facing the effects of  continuing increases in crude oil prices.
• The situation in India is further exacerbated by continuing overcapacity as well as the fact that the operating costs in the Indian environment have always been higher than other comparable countries.
• These factors will have led to an overall industry loss of, we believe, close to USD 1.0 billion for FY 2008 and if the current trends in oil prices continue, the losses could well be close to USD 2.0 billion in FY 2009
• The rate of capacity induction during this quarter and more generally in the market has started to slow down. For the quarter ending March 2008, capacity grew by 18.1 % versus 36.7% during same period last fiscal. The growth rates in the last few quarters have been close to 38%.
• Jet Airways’ capacity deployed during this quarter was in line with the same period last year due to the network rationalization initiatives. This is an exercise which we will continue to do going forward, we also reduced 1 row of J & Y class seats to improve passenger convenience on most of our flights.
• The growth in demand has also tapered off to some extent due to increasing Fuel surcharges which have started affecting the lowest price paying segment of the market. This market segment had contributed to very high growth rates in last few years. The overall traffic growth in the market for Q4 was 11 % as compared to same period last year.
• Fuel costs were higher by Rs. 1,284 million (US $ 32.0 million) versus the same period a year ago; this was largely due to higher rates of fuel and higher number of flights including increase in long haul sectors operated. The average fuel rate was at Rs. 47.44 per litre as compared to Rs. 36.51 a year ago and Rs 44.19 per litre in the preceding quarter.

Increase in other operating costs:

• There was a charge close to of Rs. 690.1 million (US $ 17.2 million) on account of derivative transactions which were marked to market as on March 2008, and were extraordinary in nature.
• Additional there were instances of aircraft on ground and not having been fully utilized for the quarter and the impact of such instances was Rs. 240.72 million (US $ 6.0   million). These aircraft have been fully utilized in June 2008.
• At the Company level, the average staff numbers increased from 10,590 to 12,777       on account of the expansion in level of international operations. New hires among pilots, engineers and cabin crew constituted the bulk part of this increase.
• The increases in all other costs were in line with the increase in level of operation and in most instances even lower than that of the same period last year.

International operations

The revenues from our International operations now account for 42.% of operating revenues (Rs. 11,598 million, US $ 289.1 million) as compared to 23.7% (Rs. 4,689 million, US $ 107.86 million) in the fourth quarter of last year.

The Company achieved a seat factor in international operations of 69.0% for the quarter (76.6% a year ago).

 
The pre-tax loss on international operations was Rs. 2,633 million (US $ 65.6) as against a pretax profit of Rs. 31 million (US $ 0.7million) in the same period last year. This was largely on account of the start up nature of the new routes to the USA, Gulf that we started during the last few months.

During the quarter we inducted 3 additional widebody aircraft to the fleet in addition to the 3 narrow body aircraft that we added to our domestic fleet.

Our International network has been further enhanced with more codeshare agreements that we have announced the principal amongst them being the ones with American Airlines, Air Canada, ANA and Etihad more recently.
 

Outlook

The next few quarters is expected to be impacted negatively by very high fuel prices as we have seen in the months of April, May and June and airlines across the world are reeling under this “oil shock”. This is putting significant pressure on airline operating costs

The current rate per liter of ATF is close to Rs. 70 as compared to Rs. 39 in January 2007. Though fuel surcharges in the domestic operations have been increased consistently, basic fares have been under pressure.

The domestic and International seat factors in the months of April and May 2008 have been at around 74%  and  64 % respectively.

We have maintained our Market leadership position consistently despite not adding any seat capacity and our seat factors have been much higher than the industry average.

The rate of capacity induction in the domestic environment has seen a steady decrease quarter over quarter. Airlines are reportedly going slow on capacity addition and some airlines are also reportedly pulling out of certain markets/ routes. These factors should help in bringing stability to the market and help to increase yield.

Jet Airways has recently implemented a minimum selling price in addition to increased YQ. This will also help improve/ increase yields.

During the first half of FY 2009, we have launched new sectors including San Francisco, Hong Kong and Abu Dhabi. We plan to launch flights to Dubai & Saudi Arabia by October 2008, which will complete our first phase of International expansion.

Though the very high oil prices are affecting demand on International sectors to some extent, our forward bookings on international routes are as per our expectations.

No major relief on input costs like Sales Tax or Excise has some through except in some states. The airlines have been actively lobbying with the ministry on these issues and we await any decision in this regard, which we believe will be positive for the industry.

Overall, we expect the next few quarters to be very challenging

Financial results of Jet Lite for the Q4 and year ended March 2008

• Achieved seat factor of 69.5% in Q4 (vs 71.6% for Q3 FY08)
• Achieved Revenues of Rs. 3,874 million (US $ 96.6 million) in Q4 and 15,055 million (US $ 375.2 million) for FY’08 v/s  Rs. 20,147 million (US $ 463.5 million) for FY 2007.
• Negative EBITDAR of Rs. 832 Million (US $ 20.7 million) in Q4 and Rs. 1,457 million (US $ 36.3 million) for FY’08 v/s negative Rs. 2,809 million  (US $ 64.6 million) for FY 2007
• Loss before tax of Rs. 1,633 million (US $ 40.7 million) in Q4 and Rs. 4,396 million (US $ 109.6 million) for FY’08 v/s loss of Rs. 6,877 million (US $ 158.2 million) for FY 2007.
• Break even seat factor for FY’08 at  93.6  % (vs  92.5%  in FY 2007)
• Revenue per RPKM Rs. 3.2 in Q4 and Rs. 3.4 in FY’08 (vs  Rs 4.6 in FY 2007)
• Cost per ASKM Rs. 3.3 in Q4 vs Rs. 3.1 in Q3 only due to high fuel rate.
• Cost per ASKM w/o Fuel is ~40% lower than pervious year ( Rs.1.72 in FY’08 vs 2.85 in FY’07 )

Exchange rate used 1 USD = INR 40.12

Awards and Recognition

• Jet Airways, India's premier international airline, has won the 'Best Cargo Airline of Central Asia' at the prestigious Cargo Airline of the Year Awards, held at the Royal Lancaster Hotel, London. May 2008.
• Jet Airways wins the Coveted ‘Program of the Year’ for the Second Year consecutively. Jet Privilege, India’s largest and most recognized frequent flyer programme, won 9 Freddie Awards at the 20th Annual presentation ceremony of the Freddie Awards 2007, held in Wyndham Phoenix, USA on April 24, 2008.
• New York - January 24, 2008: Jet Airways has been voted the Best Airline in Central/South Asia & India in an annual Global Traveler magazine survey. The survey, conducted among readers of the magazine, identifies the best in business and luxury travel - and is one of the most respected of its kind.
• Jet Airways has won the Award for Customer & Brand Loyalty in the "Commercial Airlines Sector (Domestic)", at the Indiatimes Mindscape and Saville Row ( A Forbes Group Venture ) Awards ceremony , held at the Taj Lands End Mumbai, on 22nd January 2008.

About Jet Airways

Jet Airways currently operates a fleet of 84 aircraft, which includes 10 Boeing 777-300ERs aircraft, 54 classic and next generation Boeing 737-400/700/800/900 aircraft, 9 Airbus A330-200 aircraft, and 11 modern ATR 72-500 turboprop aircraft. With an average fleet age of 4.30 years, the airline has one of the youngest aircraft fleet in the world. Jet Airways operates over 385 flights daily.
 
Jet Airways currently flies to 62 destinations that span the length and breadth of India and beyond, including New York (JFK and Newark), Toronto, Brussels, London Heathrow, Singapore, Kuala Lumpur, Colombo, Bangkok, Dhaka, Kathmandu, Bahrain, Kuwait, Doha Muscat, Abu Dhabi, Shanghai, and San Francisco. The airline plans to extend its international operations to other cities in North America, Europe, Africa and Asia in phases with the introduction of wide-body aircraft into its fleet. Since its inception in May 1993 to March 2008, Jet Airways has flown over 82.8 million passengers.

About Jet Lite

Jet Lite currently operates a fleet of 24 aircraft, which includes 17 Boeing B737 and 7 CRJs. Jet Lite operates around 135 flights daily.
 
Currently serves 31 destinations within India and also flies to Colombo and Kathmandu.

Disclaimer: "Certain statements in this release concerning Jet Airways’ future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in the aviation business including those factors which may affect our cost advantage, wage increases, our ability to attract and retain professionals, time and cost overruns on various parameters, our ability to manage our international operations, liability for damages, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital, and general economic conditions affecting our industry. Jet Airways may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. Jet Airways does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the company."