April 25, 2024 09:05 (IST)
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Jet Airways reports improvement in financial performance by 26 pct
Mumbai, Aug 11 (IBNS): Jet Airways Group on Monday reported an 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 Rs. 904 million or 26 percent. The net loss before taxes is Rs. 2,580 million compared to a net loss of Rs. 3,485 million..
Total revenue (combined) for the first quarter FY15 increased by 12.8 percent to Rs. 50,401 million from Rs. 44,693 million.
Passenger revenues for Q1 FY15 rose by 11.1 percent to Rs. 42,626 million from Rs. 38,355 million, and cargo revenue by 10.2 percent to Rs. 3,633 million from Rs. 3,297 million, compared to the first quarter last year.
Yield was up by a strong 1.8 percent, 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 Rs. 4.68 from Rs. 4.40.
While domestic RASK rose by 7.4 percent to Rs. 5.53 from Rs. 5.15, international RASK increased by 8.2 percent 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 Rs. 3,297 million to Rs. 3,633 million in cargo revenues was driven largely by the new commercial collaboration, which includes a common suite of products, shared freighter operations and procurement, the company said.
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 Rs. 2,700 million for the current year. All the aircraft of the airline are now effectively deployed.
International operations results improved by 86 percent underpinned by a surge of 157 percent 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, it said.
Naresh Goyal, Chairman of Jet Airways, said: “We are taking stringent measures to operate in an industry which continues to face tough challenges, and while there are no short-term solutions, I am very pleased with the demonstrable progress we have made in several areas."
“Our first priority in this three-year turnaround strategy, which includes both financial and operational restructuring, has been to establish a more solid financial foundation for this airline, and in this regard, the company has already taken a series of measures to retire high cost debt and reduce borrowing costs," Goyal said.
Goyal said that the strategic alliance with Etihad Airways had been pivotal in putting in place a new business strategy, the benefits of which are now being seen.
Jet Airways said it intends to build on this success and will launch 12 new international flights by the end of the year. These destinations include Abu Dhabi, Dubai, Doha, Singapore, Ho Chi Minh City and Bangkok.
The airline also has long term plans for non-stop operations to Europe and China using the most advanced and efficient wide-body aircraft. The organic network expansion coupled with enhanced global connectivity through codeshares is expected to increase international passenger traffic significantly.
Also Jet Airways will dry-lease one of its Boeing 777-300ER to Etihad Airways to operate a new daily service to New Delhi and San Francisco from Abu Dhabi starting on Nov 18.
Travellers from India are able to clear US Customs and Immigration in Abu Dhabi allowing them to arrive in America as domestic passengers, thereby avoiding airport congestion and saving time.
Jet Airways’ home hubs of Delhi and Mumbai continue to develop and are playing an integral and increasing role as connecting points in the airline’s expanding network. Importantly, over 45 per cent of the airline’s international traffic to and from these hubs connects from its domestic network and other international destinations.
Meanwhile, the domestic market remains challenging in the face of increasing competition. In order to address this, and restore profitability to this part of the business, the airline will enhance its domestic product offering, including improving connectivity within India and to and from international services, along with the expansion of codeshare partnerships.
In cargo, the strategic alliance has also seen Jet Airways be part of Etihad Airways’ global key account programs, enabling increased engagement with the largest global forwarders, broadening distribution and elevating Jet’s profile.
Jet Airways and Etihad Airways now operate shared freighter operations, with capacity sharing on the Hong Kong to Delhi route and on the recently launched route between Mumbai and Noi Bai in Hanoi. Joint procurement in cargo handling has already generated considerable savings amounting to more than Rs. 21 million per year.
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