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Jet Airways, India’s largest airline group reported impressive earnings for the quarter ending March 31, 2010 as a result of a series of strategic marketing and financial initiatives implemented during the fiscal year. The revival in the domestic travel industry and high levels of seat factors achieved in the International operations also have contributed to these results. The improvement in EBITDAR margin was also due to cost efficiencies that we have achieved over the last few quarters.
The Jet Group has maintained its leadership in the Indian aviation industry with the highest market share of 25.8 % for the quarter ending March 2010.
Mr. Nikos Kardassis, Chief Executive Officer, Jet Airways (I) Ltd said, “The positive turnaround at the Jet Airways’ Group is a result of constant product innovation, stringent cost management, smart marketing and strong fiscal prudence, as well as the hard work dedication and commitment of our people.
Our unique ability to develop unique solutions like the recent introduction of Jet Airways ’Konnect Select’, a new premium cabin offering on Jet Konnect flights, is a prime example of a carrier that is able to undertake strategic initiatives, as a direct response to dynamic market requirements. Also, the pace at which we responded to crisis situations like the recent volcanic ash issue is a clear indication of how Jet is able to act rapidly in such situations and provide solutions to customers.
As the buoyant global economic environment, coupled with the relaxation of governmental and corporate travel restrictions, results in an upswing in air travel demand, Jet Airways is perhaps the best poised to benefit from the growth. In the quarter ending March 2010, the domestic and international traffic for Jet Airways grew by 26% and 31% respectively, with the continued buoyancy in the Indian domestic environment. The Industry load factors have also moved up to the low to mid 70% range over the last few months.
Our code share agreements, as well as the introduction of new domestic and international routes like the recently launched Mumbai-Johannesburg-Mumbai service, will also hold the airline in good stead for the future.”
Jetlite has also shown a strong turnaround in operating performance. Jetlite is still achieving higher yields as compared to other low fare operators as is Jet Airways Konnect in addition to achieving high levels of seat factors.
Highlights on Domestic operations
Domestic operations accounted for 44% of total revenues Rs. 12,555 million (US$ 279.6 million).Domestic traffic for Jet grew by 26.3% for the quarter vs same period last year. As against this, industry traffic grew only by 21%. Seat factors grew from 64.6% in Q4 FY09 to 72.9% in Q4 FY10 on a higher capacity (ASKM of 2,600 million in Q4FY10 versus 2,330 million in Q4 FY09). The EBITDAR margins are at 23% in Q4FY10 versus 17% in Q4 FY09.
Highlights on Jet Airways Konnect
In the competitive domestic low fare segment, Jet Airways initiative of introducing Jet Airways Konnect service in May 2009 has also contributed to its strong performance, registering average load factors of ~73% for Q4 FY10, boosting network wide seat factors and revenues.
Highlights on International operations
International operations accounted for 56% of total revenues Rs. 16,217 million (US$ 361.2 million). Achieved record high seat factor of 81.6% in Q4 FY10 versus 75.3% in Q4 FY09. The EBITDAR margins are at 23% in Q4FY10 versus 24.0% in Q4 FY09. These results include a negative impact of aircraft on ground of Rs. 532.77 million (US$ 11.8 million) for the quarter.
Outlook
Domestic air traffic has seen a reviving trend over the last few months based on recent traffic data. Airlines have achieved high levels of seat factors as well as yield growth. The industry traffic grew by 21 % in Q4 FY 2010 as compared to Q4 FY 2009. We are seeing healthy seat factors for April and May 2010. The trends for next few months look healthy and the capacity situation has been under control for the last few months.
Jet Airways Konnect has seen significant traction and has helped us regain & hold our top spot in the industry by a healthy margin. It has also resulted in higher revenues & load factors overall. We are seeing a premium demand revival and this is expected to continue over the next few quarters. From May 2010, we have introduced “Konnect Select” a new premium service in Jet Airways Konnect aircraft.
On the International routes, we were able to achieve seat factor of over 80% for the last few months and are seeing consistent growth in operating margins. We have been successful in adapting to market realities and have been able to lease out excess capacity for medium term. As of May end, all of our excess wide body aircraft would have been leased out. Our cost initiatives are starting to show good results and we have been able to achieve lower Cost per ASKM (ex fuel) while we continue to focus on premium traffic and improvements in Revenues per departure. On the Jetlite front, all of our CRJ aircraft are in the process of being returned to the lessors and by September, we will have an all Boeing fleet in Jetlite.
TravelDailyNews Asia-Pacific editorial team has an experience of over 35 years in B2B travel journalism as well as in tourism & hospitality marketing and communications.
