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Jet Airways falls deeply into the red in 2QFY2012 but efforts in place to improve financial position

23-Nov-2011

Jet Airways Group, India's largest airline group by market share, swung to an expected net loss in the traditionally weak second quarter (2QFY2012, three months ended 30-Sep-2011) compared with a profit a year ago, hurt by rising fuel prices, a tough pricing environment and large forex losses in the quarter, despite strong passenger and revenue growth. Yield weakness was a concern for Jet Airways, like its peers in the quarter, with Jet Airways senior VP finance, M Shivkumar, noting Air India has been compounding a price war that has caused industry-wide losses and weakened yields. 

"Air India is discounting fares and that’s absolutely a problem. Ideally, fares should go up when oil-import costs go up. That’s not happening and that’s why airlines are in this situation," Mr Shivkumar said, as quoted by Bloomberg. CCO Sudheer Raghavan, however, noted that it is seeing “significant” yield improvements in Nov-2011, with fare increases of 18-20% in recent weeks, amid capacity cutbacks by Kingfisher Airlines over the peak travel period in India. "We feel that there will not be any undue pressure on the yields in the coming months," Mr Raghavan said. [3652 words]

Unlock the following content in this report:

Subheadings:

  • Efforts in place to improve financial position in a tough operating environment
  • Jet Airways reports EBITDAR margin of 9.2%; profitable internationally, loss-making domestically
  • 50% increase in fuel costs drives cost increases
  • 3.9 million pax in 2Q; 13 ppts gap between actual and breakeven load factors
  • JetLite continues loss-making run; 25 ppt gap between actual and breakeven load factors
  • Jet Airways Group reports EBITDAR margin of 3.6%
  • Jet Airways increasing low-fare capacity in reaction to industry trends
  • Reacting to Kingfisher moves in the short-term
  • Jet Airways to add routes in Southeast Asia/Gulf in next six months; Europe expansion in future
  • Jet Airways coming around on FDI
  • Jet Airways inducts 100th aircraft
  • Less turbulence ahead for Jet Airways but challenges remain

Graphs and data:

  • Jet Airways financial results: 2QFY2012
  • Jet Airways profit and loss statement: 2QFY2012
  • Jet Airways revenue: 1QFY2009 to 2QFY2012
  • Jet Airways revenue per RPKM growth and cost per ASKM growth: 1QFY2009 to 2QFY2012
  • Jet Airways operating results: 2QFY2012
  • Jet Airways passenger numbers and passenger number growth: 1QFY2009 to 2QFY2012
  • Jet Airways breakeven seat factor and passenger load factor: 1QFY2009 to 2QFY2012
  • Jet Airways market share: 2QFY2012
  • Jet Airways domestic industry capacity and passengers: Sep-2010 to Sep-2011
  • JetLite profit and loss statement: 2QFY2012
  • Jetlite pax growth, ASK growth, breakeven load factor and passenger load factor: 1Q2009 to 2QFY2012
  • JetLite operating results: 2QFY2012
  • India domestic LCC market share: Jan-2006 to Oct-2011
  • Jet Airways domestic operating parameters: 2QFY2012
  • Jet Airways domestic profit and loss statement: 2QFY2012
  • Jet Airways international operating parameters: 2QFY2012
  • Jet Airways international profit and loss statement: 2QFY2012
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