Jet Airways Q1 performance up 26 percent
Compared to the same quarter of the previous financial year; Jet Airways' financial performance improved by INR M 904 or 26 percent. The net loss before taxes is INR M 2,580 compared to a net loss of INR M 3,485.
Total revenue (combined) for the first quarter FY15 increased by 12.8 percent to INR M 50,401 from INR M 44,693. Passenger revenues for Q1 FY15 rose by 11.1 percent to INR M 42,626 from INR M 38,355, and cargo revenue by 10.2 percent to INR M 3,633 from INR M 3,297, 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 percent 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 percent to INR 4.68 from INR 4.40. While domestic RASK rose by 7.4 percent to INR 5.53 from INR 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 percent increase from INR M 3,297 to INR M 3,633 in cargo revenues was driven largely by the new commercial collaboration, which includes a common suite of products, shared freighter operations and procurement.
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 INR M 2,700 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.
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.
Jet Airways 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 18 November 2014. 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 percent of the airline's international traffic to and from these hubs connects from its domestic network and other international destinations.
Complementing this development, Jet Airways will expand operations to Abu Dhabi progressively, connecting more points in India directly with international flights. In its own right, Jet Airways will also operate flights beyond Abu Dhabi, offering Indian passengers improved connections and more choice to North America and additional points in the Middle East. Integration with the Etihad Airways expanding network provides seamless connection to destinations in Africa, Europe, North and South America and the Middle East.
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 INR M 21 per year. ■