Jet Airways

Jet Group Q2 FY13 operating profit up 355% YoY despite high fuel prices and depreciating rupee; yields up 34 % YoY and 11% QoQ

November 2, 2012

Editor’s Synopsis (Jet Airways and Jetlite combined):

Q2 FY13 Total Revenue (combined) of Rs. 46,266 million or US $ 875.3 million up by 24.2%,

EBITDAR of Rs.6,668 million or US $ 126.2 million for Q2 FY13 vs. Rs. 1,466 or US $ 29.9 million for same period last year, up by 355%

EBITDAR margin for Q2 FY13 of 14.6% vs. 4.0% for Q2 FY12

Highlights for quarter ended September 30, 2012 vs. September 30, 2011 – JET AIRWAYS

Operational

• System-wide ASKMs of 9,075 million
• System-wide RPKMs of 6,803 million
• System wide seat factor of 75.0%
• 3.69 million revenue passengers carried

Financial

• Revenue of Rs. 41,905 million or US $ 792.8 million up by 25.8%
• EBITDAR of Rs.6,515 million or US $ 123.3 million in Q2 FY13 vs. Rs. 1,867 million or US $ 38.1 million in Q2 FY12
• EBITDAR Margin at 15.7% in Q2 FY13 vs. 5.7% in Q2 FY12
• Loss after tax Rs. 997 million or US $ 18.9 million vs. Rs. 7,136 million or US $ 145.7 million.

Exchange rate used 1 US $ = INR 52.855 for current quarter and 1 US $ = INR 48.975 for previous year same quarter

Highlights for quarter ended September 30, 2012 vs. September 30, 2011 - JETLITE

• Achieved seat factor of 69.0% in Q2 FY13 versus 74.7% in Q2 FY12
• Revenue of Rs. 4,360 million or US $ 82.5 million, up by 10.7%
• EBITDAR of Rs. 153 million or US $ 2.9 million in Q2 FY13 versus negative EBITDAR of Rs. 400 million or US $ 8.2 million
• EBITDAR Margin at 3.6% in Q2 FY13 vs. negative EBITDAR margin of 10.2% in Q2 FY12
• Loss after tax Rs. 663 million or US $ 12.5 million versus Rs. 1,008 million or US $ 20.6 million

Highlights for half year ended September 30, 2012 vs. September 30, 2011 – JET AIRWAYS

Operational

• System-wide ASKMs of 19,360 million
• System-wide RPKMs of 15,305 million
• System wide seat factor of 79.1%
• 8.55 million revenue passengers carried, up 7.4%

Financial

• Revenue of Rs. 88,273 million or US$ 1,670.1 million up by 27.7%
• EBITDAR of Rs.13,910 million or US$ 263.2 million in Q2 FY13
• EBITDAR Margin at 15.9% in H1 FY13
• Loss after tax Rs.750 million or US$ 14.2 million

Exchange rate used 1 US $ = INR 52.855 for current quarter and 1 US $ = INR 48.975 for previous year same quarter

Highlights for the half year ended September 30, 2012 vs. September 30, 2011 - JETLITE

• Achieved seat factor of 74.5% in H1 FY13
• Revenue of Rs. 9,992 million or US$ 189.0 million
• EBITDAR of Rs. 1,013 million or US$ 19.2 million in H1 FY13
• EBITDAR Margin at 10.3% in H1 FY13
• Loss after tax Rs. 546 million or US$ 10.3 million versus Rs. 1,061 million or US$ 21.7 million last year

Management Discussion and Analysis (for the quarter)

Lean season, economic slowdown and consequential dip in industry passenger traffic coupled with high fuel prices and rupee depreciation vis-a-vis the US dollar has affected the overall results of Jet group. Fuel rates increased around 17% YOY, a portion of this was passed on to the passengers in the form of increase in fuel surcharge during the quarter. Full impact of this will be seen from the current quarter. Overall increase in yields have helped the airline to post an operating profit of 6,668 million (US$ 126.2 million) versus an operating profit of 1,466 INR Mio (US$ 29.9 Mio). Focus on ancillary revenues has started showing results; gone up over 20% YOY.

There were instances of aircraft on ground, as certain routes were discontinued during the quarter, the impact of this is approximately US $ 6 million. These aircraft will be leased out in the next few months.

In the current scenario, Jet Airways has managed to remain competitive through series of planned steps, such as sale / sale and lease back of aircraft, discontinuing loss making routes and stringent cost control measures. The ongoing initiatives will augment well for the airlines performance in the quarters to come.

Mr. Nikos Kardassis, Chief Executive Officer, Jet Airways (I) Ltd said,

“Improvement in yields has helped the group to post an operating profit, however, lean season, slowdown in industry passenger traffic due to weakened economic scenario, high fuel prices coupled with high rupee depreciation versus the dollar has pulled the overall results down.

We have focused on removing loss making routes, network rationalisation and selectively adding routes which made economic sense. The result of these initiatives are quite evident from the improvement in operating profit YOY by Rs. 5,202 million (US$ 98.4 million) for Jet group.

We believe and strive for customer satisfaction by investing into effective marketing strategies and proactive initiatives resulting in enhancing our guest experience. Jet airways roots for customer delight while building industry benchmark for service excellence and supreme quality.”

Highlights on Domestic operations

Domestic operations of Rs. 17,008 million or US$ 321.8 million accounted for 41% of total revenues. Domestic traffic for Jet Airways went down by 6.6% for the quarter vs same period last year. (Industry traffic went down by 10.3%) Seat factors are 65.6% in Q2 FY13 and ASKMs are 3,035 million in Q2 FY13 The EBITDAR margin is at 9.3% in Q2 FY13 versus negative EBITDAR margin of 8.1% in Q2 FY12

Highlights on International operations

International operations of Rs. 24,898 million or US$ 471.1 million accounted for 59% of total revenues.
Over this period, the achieved seat factor on the International routes was consistently around 80% reflecting the maturing nature of the International operations.
For the quarter, International traffic went down by 2.1% for the quarter vs. same period last year, while we achieved seat factor of 79.7%.
The EBITDAR margins are at 20.0% in Q2FY13 vs. 13.6% in Q2 FY12

Outlook

The peak season ahead will help the airline to improve yields further. The forward bookings trends for the quarter are quite encouraging. Our focus remains to discontinue loss making routes and selectively introduce additional flights/ new flights on the sectors contributing to the bottom line. In this ensuing peak season more of business class seats will be on offer.

Signs of improvement in Crude oil prices and rupee depreciation are seen. We continue with our cost reduction initiatives ex-fuel. Sale / Sale and Lease back of aircraft to be done in the forthcoming quarters. All these should help to improve the bottom line further and generate cash.

Focus on various avenues of Ancillary revenues should help to boost revenues in the quarters to come.

About Jet Airways:

Jet Airways currently operates a fleet of 100 aircraft, which include 10 Boeing 777-300 ER aircraft, 11 Airbus A330-200 aircraft, 60 next generation Boeing 737-700/800/900 aircraft and 19 modern ATR 72-500 turboprop aircraft. With an average fleet age of 6.13 years, the airline has one of the youngest aircraft fleets in the world. Flights to 73 destinations span the length and breadth of India and beyond, including Abu Dhabi, Bahrain, Bangkok, Brussels, Colombo, Dammam, Dhaka, Doha, Dubai, Hong Kong, Jeddah, Kathmandu, Kuwait, London(Heathrow), Milan, Muscat, New York (Newark), Riyadh, Sharjah, Singapore and Toronto.

About JetKonnect:

A consolidation of the erstwhile JetLite and Jet Airways Konnect brands, the new JetKonnect service is a dedicated product designed to meet the needs of the low fare segment. JetKonnect will also offer guests a Premiere service on certain select routes. With its mixed fleet of Boeings and ATR aircraft and 400 daily flights connecting 56 destinations across India, JetKonnect provides more flexibility and choice to its guests, making it India’s largest low fare brand. JetKonnect’s convenient schedules, reliable service and low fares promise to bring greater value and a seamless flying experience to our customers.

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.

 

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