Jet Airways, India’s largest airline group has reported record operating performance for the first quarter ended June 30, 2010, aided by improvement in global business and leisure travel, improved On Time Performance and a series of strategic marketing initiatives implemented during the previous quarters. The improvement in EBITDAR margin was also due to the various cost efficiencies that we have achieved over the last few quarters.
The continued resurgence in the domestic travel industry and sustained high levels of seat factors achieved in the International operations has mainly contributed to these results.
The Jet Group has maintained its leadership position in the Indian aviation industry with the highest market share of 26.2 % for the quarter ending June 2010.
Nikos Kardassis, Chief Executive Officer, Jet Airways (I) Ltd said, “Nine consecutive months of robust growth, underline the fact that Jet Airways, as a customer centric organization has been able to capitalize on the resurgent trend in domestic and global air traffic. This growth has been achieved through integration in operational efficiencies; effective network planning, strategic code shares, distinctive marketing initiatives and improved reliability and On Time Performance, all of which has helped the airline stay a step ahead of the growth curve.”
The airline is committed to enhancing the asset utilization, strengthening key hubs at Delhi & Mumbai and improve overall margins going forward.
JetLite, the wholly owned subsidiary of Jet Airways India Ltd, has also posted a remarkable improvement in operating margins and revenue passengers for the quarter, carrying over million for the three months ended June 2010. Improved services, enhanced reliability and code shares with Jet Airways, have all enabled the airline to improve its penetration of the travel market in India.
Highlights on Domestic operations
Domestic operations accounted for 44% of total revenues Rs. 13,297 million (US$ 286.3 million).
Domestic traffic for Jet grew by 39.1% for the quarter vs same period last year. As against this, industry traffic grew only by 23%
Seat factors grew from 67.3% in Q1 FY10 to 79.1% in Q1 FY11 on a higher capacity (ASKM of 2,772 million in Q1FY11 versus 2,257 million in Q1 FY10)
The EBITDAR margins are at 18.9% in Q1FY11 versus 11.2% in Q1 FY10.
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 ~81% for Q1 FY11, boosting network wide seat factors and revenues.
The success of Jet Konnect Select, a new premium offering, further exemplifies our understanding of the dynamic needs of the Indian consumer.
Highlights on International operations
International operations accounted for 56% of total revenues Rs. 16,935 mn (US$ 364.6 mn)
For the quarter, we achieved seat factor of 80.1% versus 76.5% in Q1 FY10.
The EBITDAR margins are at 21.5% in Q1FY11 versus 22.3% in Q1 FY10.
These results include a negative impact of aircraft on ground of Rs. 391 mn (US$ 8.4 mn) for the quarter and impact on account of Volcanic Ash incidents in April/ May, which resulted in a revenue loss/ fixed and other costs amounting to Rs. 334 million (US$ 7.2 million)
The first quarter saw the introduction of Johannesburg as the airlines’ gateway to the African continent.
We also inked Code share agreements with United Airlines and Gulf Air during the quarter which will have further positive contribution to the revenues going forward.
Outlook
The world’s airlines are experiencing a marked improvement in demand in 2010, Indian Carriers being no exception. Indian GDP forecast for the year is around 8.5% which indicates a reviving economy, effects of which are seen in the domestic air traffic showing a reviving trend over the last few months. Airlines have achieved high levels of seat factors as well as yield growth. The industry traffic grew by 23 % in Q1 FY 2011 as compared to Q1 FY 2010.
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.
Our International operations have yet again achieved seat factors of over 80% despite launch of our new Johannesburg route in April where start up loads and revenues were lower. Over the last few quarters, we are seeing consistent growth in operating margins and expect the same to continue in future.
Jetlite has also been consistently profitable over the last few quarters and is a result of the cost initiatives, higher revenues due to fleet and network realignments as well as significant improvements to the reliability and on time performance of the airline. All of our CRJ aircraft are in the process of being returned to the lessors.
Financial
Revenue of Rs. 30,232 mn (US$ 650.9 mn) up by 24.5%
EBITDAR of Rs.6,044 million (US$ 130.1 mn) in Q1 FY11 versus Rs. 4,179 million (US$ 87.2 million) in Q1 FY10 up by 44.6%
EBITDAR Margin at 20.4% in Q1 FY11 versus 17.4% in Q1 FY10
Profit after tax Rs. 35 mn (US$ 0.8 million) versus loss of Rs.-2,253 million (US$ -47.0 million)