OREANDA-NEWS. November 11, 2011. Tough pricing environment, lean season impact and high fuel prices impacted the results for Q2 FY12. The results were also impacted by an exceptional Forex loss due to depreciation of the Rupee amounting to Rs. 2,580 million or USD 52.7 million

Fuel prices went up by 41% on a year over year basis and the impact of the same was Rs. 5,951 or USD 121.5 million for the quarter

Q2 FY12 Total Revenue (combined) of Rs. 37,259 million or USD 760.8 million up by 7.1%,

Q2 FY12 passenger growth of 15.5% vs same period last year

Domestic passengers grew by 16.7%

EBITDAR of Rs.1,311 million or USD 26.8 million for Q2 FY12

EBITDAR margin for Q2 FY11 of 3.6%

Highlights for quarter ended September 30, 2011 vs. September 30, 2010 – JET AIRWAYS

Operational
System-wide ASKMs of 9,214 million, up 8.7%
System-wide RPKMs of 7,165 million, up 9.2%
System wide seat factor of 77.8% vs. 77.4%
3.89 million revenue passengers carried, up 12.6%

Financial

Revenue of Rs. 33,321 million or USD 680.4 million up by 7.6%
EBITDAR of Rs.1,729 million or USD 35.3 million in Q2 FY12
EBITDAR Margin at 5.3% in Q2 FY12
Loss after tax Rs. -7,136 million or USD -145.7 million
Exchange rate used 1 USD = INR 48.975 for current quarter and 1 USD = INR 44.935 for previous year same quarter

Highlights for quarter ended September 30, 2011 vs. September 30, 2010 - JETLITE

Achieved seat factor of 74.7% in Q2 FY12 versus 74.2% in Q2 FY11
Revenue of Rs. 3,938 million or USD 80.4 million, up by 3.0%
EBITDAR of Rs. -418 million or USD-8.5 million in Q2 FY12
EBITDAR Margin at -10.7% in Q2 FY12
Loss after tax Rs. -1,008 million or USD -20.6 million

Highlights for half year ended September 30, 2011 vs. September 30, 2010 – JET AIRWAYS

Operational

System-wide ASKMs of 18,533 million, up 11.3%
System-wide RPKMs of 14,476 million, up 10.7%
System wide seat factor of 78.1%
7.95 million revenue passengers carried, up 13.6%

Financial

Revenue of Rs. 69,145 million or USD 1,412 million up by 13.0%
EBITDAR of Rs.5,041 million or USD 102.9 million in Q2 FY12
EBITDAR Margin at 7.4% in H1 FY12
Loss after tax Rs. -8,368 million or USD -170.9 million

Exchange rate used 1 USD = INR 48.975 for current quarter and 1 USD = INR 44.935 for previous year same quarter

Highlights for the half year ended September 30, 2011 vs. September 30, 2010 - JETLITE

Achieved seat factor of 77.4% in H1 FY12
Revenue of Rs. 8,259 million or USD 168.6 million
EBITDAR of Rs. -576 million or USD -11.8 million in H1 FY12
EBITDAR Margin at -7.0% in H1 FY12
Loss after tax Rs. -1,061 million or USD -21.7 million

Management Discussion and Analysis (for the quarter)

Despite strong passenger and revenue growth, in the current quarter ended September 30th 2011 Jet Airways, India’s premier international airline group, has been impacted by abnormally high fuel prices and competitive pressures induced by low pricing and arbitrary fare cuts by other airlines. This coupled with rupee depreciation vis-à-vis the US Dollar and the fact that the second quarter is traditionally a lean season, have further resulted in lower yields. All of which has taken a toll on the operating performance of the airline

In the current scenario, Jet Airways has through a series of planned steps, managed to ensure that the airline remains competitive through stringent cost control, strategic code shares that offer greater connectivity via a wider network, route rationalization and fiscal prudence. All of these non-payroll initiatives will augment well for the airlines performance in second half of current fiscal.

The airline also continues to improve its effective cost control measures implemented across various areas of the business. This coupled with structured strategic initiatives including the extension of premiere one fare passes for international travel at no extra cost on certain sectors to Gulf and SAARC countries and enhanced connectivity to South East Asian countries, has also helped.

Jet Group managed to achieve positive EBITDAR of Rs. 1,311 Mio or a EBITDAR margin of 3.6% not withstanding a 51% increase in fuel cost.

The Jet Group has maintained its dominant leadership position in the Indian aviation industry with the highest market share of 26.1% for the quarter ending September 2011.

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

"Abnormally high fuel costs, a low fares scenario induced by demand supply imbalance, together with a depreciating rupee versus the Dollar and fare cuts, coupled with the second quarter traditionally being considered the lean season, have all collectively impacted the second quarter performance of Jet Airways.

We have however managed to remain competitive through stringent cost control managed by looking at contract renegotiations, process improvements and increased ancillary revenues. The airline will also be doing a sale and lease back of some of our aircraft to repay existing high cost workings capital loans. These coupled with our strategy to promote traffic through our operational hubs in New Delhi and Mumbai, together with our strategy to offer guests enhanced connectivity via strategic codeshares and attaining customer delight through a superior onboard service product and industry leading On Time Performances, all bode well for the future.

In fact, over the last few days, we have seen significant yield improvement, and this would help Jet group to further enhance our performance in the next half of this fiscal."

Jet Airways continues to consolidate its position as India’s premier airline as is visible in the multiple awards that the airline has garnered in recent times including the three prestigious awards at the recent Times Travel Honours 2011 including the “Most Trusted Airline Brand”, “Best Domestic Full Service Carrier” and “Best International (Economy) Airline” for 2011. The recent HT – Mars Consumer Airline survey has also ranked Jet Airways as the best carrier in Indian skies. All of which is further testimony to the emergence of the airline as the preferred choice for guests travelling to and from the Indian subcontinent.

Highlights on Domestic operations

Domestic operations of Rs. 12,456 million or USD 254.3 million accounted for 37% of total revenues.

Domestic traffic for Jet Airways grew by 11.9% for the quarter vs same period last year.

Seat factors grew from 71.4% in Q2 FY11 to 72.1% in Q2 FY12 on a higher capacity (ASKMs of 3,047 million in Q2FY12 versus 2,849 million in Q2 FY11)

The EBITDAR margins are at -9.2% in Q2FY12

Highlights on International operations

International operations of Rs. 20,865 million or USD 426.0 million accounted for 63% of total revenues.

Jet Airways has now posted several consecutive months of consistent growth, reflecting the impact of our network synergies, major strategic international code shares and customer centric product and service focus.

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 grew by 14.2% for the quarter vs. same period last year, while we achieved seat factor of 80.5%.

The EBITDAR margins are at 13.6% in Q2FY12.

Outlook

The traffic in Indian domestic market continues to grow in double digits. This along with the succeeding peak season will help airlines to improve yields from hereon.

Our International operations continue to achieve seat factor of around 80%. We expect the yields to improve further on account of the peak season. It is our endeavour to enrich guest experience by our constant product & service innovation and ever improving network connectivity.

Our Business and First class seat factors are holding and we should see further improvement going forward in Q3.