Jet Airways Prepares For Tough Times
Neelam Mathews/New Delhi mathews.neelam@gmail.com
Jet Airways posted a stand-alone net profit of $10.4 million based on improved international performance, effects of the restructuring program, reduced fuel prices, and a significantly improved EBITDAR margin of 20.8% for the fourth quarter ended March 31, 2009.
During the quarter, Jet returned three B737-400s, discontinued some long-haul flights, discontinued its Cochin-Bahrain flights and introduced its Mumbai-Kuwait service. It leased two A330s (Gulf Air) and three B777s (Turkish), and wet-leased three additional B777s to Gulf Air.
Operational system-wide available seat kilometers (ASKs) of 6,969 million were down by 9.3%, revenue passenger kilometers (RPKs) of 4,997 million were down 8.3%, the 2.54 million revenue passengers carried was a reduction of 20%, and the system-wide seat factor of 71.7% was up from 70.9%.
Challenging times are ahead with continued sluggish demand for both domestic and international operations. This is more so on premium segments, thus putting pressure on overall yields. Jet has in anticipation, initiated a cost-reduction initiative which includes: Restructuring its network, aircraft leases and debt; rationalizing personnel costs; cash conservation; synergizing Jet Lite with Jet Airways; intensifying alliances; and deferring aircraft deliveries for the next one to two years.
In India, the downward trend in the domestic aviation market has continued. With the upcoming lean season, load factors and yields will continue to be under severe pressure. Jet's domestic operations accounted for 43.9% of operating revenues - $ 213.2 million- versus 58.0% at $398.8 million in the fourth quarter of the previous year.
The key factors impacting domestic performance in the fourth quarter included a general slow down in traffic due to pressure on corporate traffic, and the general recessionary impact on leisure traffic. Those factors, coupled with a reduction in capacity, led to a 12% decline in overall marketshare in Q4 this year.
The revenues from Jet's international operations now account for 56.1% of operating revenues ($272.9 million) versus 42% ($289.1 million) in the fourth quarter of last year. The company achieved a load factor of 75.3% for the fourth quarter of 2009 versus 69% for Q4 FY08 and 67.8% for Q3 FY09.
"Our efforts to stabilize the network by restructuring and allocating the right aircraft capacities to the international routes and eliminate surplus capacities by leasing out long-haul aircraft has enabled the company to achieve EBT in Q4. The major network initiatives include reduced capacity on routes to U.S./Canada by using A330s in place of the B777s and higher B737 utilization on Gulf/ASEAN routes," the Jet report said.
Image credit: Jet Airways
