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India : Improved Q1 performance shows Jet Airways strategy on track for profitability in 2017

August 12, 2014



Jet Airways Group today reported strongly improved performance for the first quarter ending 30 June 2014, as its three year turnaround strategy and the partnership with new minority shareholder Etihad Airways started to impact the business positively. Compared to the same quarter of the previous financial year; Jet Airways financial performance improved by INR M 904 or 26 per cent. The net loss before taxes is INR M 2,580 compared to a net loss of INR M 3,485.

Total revenue (combined) for the first quarter FY15 increased by 12.8 per cent to INR M 50,401 from INR M 44,693. Passenger revenues for Q1 FY15 rose by 11.1 per cent to INR M 42,626 from INR M 38,355, and cargo revenue by 10.2 per cent to INR M 3,633 from INR M 3,297, compared to the first quarter last year. Yield was up by a strong 1.8 per cent, as the business plan to reshape the airline, and the benefits of the partnership with Etihad Airways, took hold.

The total number of revenue passengers who travelled with Jet Airways increased by 4.3 per cent to 5.19 million from 4.98 million, with passenger load factor increasing by 2.3 percentage points from 77.9 to 80.2 as the airline gained new customers.

Overall RASK (revenue per available seat kilometre) in Q1 FY15 increased by 6.4 per cent to INR 4.68 from INR 4.40. While domestic RASK rose by 7.4 per cent to INR 5.53 from INR 5.15, international RASK increased by 8.2 per cent to 4.18 from 3.86, reflecting the strengthening of the international operations of the airline.

The cargo performance provides further critical proof of the turnaround at Jet Airways. The 10.2 per cent increase from INR M 3,297 to INR M 3,633 in cargo revenues was driven largely by the new commercial collaboration, which includes a common suite of products, shared freighter operations and procurement.

The economies of scale and cost saving opportunities offered by the airline s equity partnership with Etihad Airways through shared resources and facilities, and collaborative procurement has also been responsible for significant savings. In a prime example, Jet Airways has renegotiated maintenance contracts which have resulted in savings of about INR M 2,700 for the current year. All the aircraft of the airline are now effectively deployed.

International operations results improved by 86 per cent underpinned by a surge of 157 per cent in codeshare traffic, which grew to 118,253 passengers in the first quarter. This is expected to increase further as the full extent of the codeshare expansion with Etihad Airways and Air France, which were activated only halfway through the quarter, take effect and Jet Airways planned international network expands and more codeshares come online.


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Source: TendersInfo (India)


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