Rupee depreciation and Economic slowdown results in Jet Group posting a Loss After Tax of INR 9,985 Million for Q2 FY14

Highlights for quarter ended September 30, 2013 vs. September 30, 2012 (Jet Group)

Mumbai, October 23, 2013

Operational

12% growth in number of passengers.
3% growth in Available Seat Kilometres.
6% growth in number of departures.

Financial

1% increase in operating revenue, Q2 FY14 operating revenues are INR 46,079 Mio vs. Q2 FY13 was INR 45,630 Mio.
11% decrease in passenger yields to Rs. 7,376 from Rs. 8,335

Lean season and economic slowdown resulted in drop in yields. Depreciating currency, high fuel prices and increases in airport charges in select Indian airports have driven cost pressures resulting into losses.

There were also instances of aircraft on ground, the impact of which was approximately INR 1,233 million. These aircraft will be leased out in the next few months.

Fuel rates increased approximately by 8% YOY. A portion of this was passed on to the passengers in the form of increase in fuel surcharge during September and early October. Full impact of this will be seen from the current quarter.

Mr. Gary Toomey, Chief Executive Officer, Jet Airways (I) Ltd said,

“Indian aviation Industry witnessed increasing cost challenges, mainly due to Rupee depreciation against US Dollar, high fuel prices and increase in airport charges in certain stations putting pressure on the bottom line.

In the current scenario, Jet Airways has managed to remain competitive through series of planned steps, such as discontinuing loss making routes and stringent cost control measures. The ongoing initiatives will augment well for the airline’s performance in the quarters to come.

We believe and strive for customer satisfaction by investing into effective marketing strategies and proactive initiatives resulting in enhancing our guest experience. Jet airways roots for customer delight while building industry benchmark for service excellence and supreme quality.”

Outlook

Q3 will reflect high seasonality, which will help to improve yields. Domestic fare revision which was made at the fag end of Q2 will start showing positive effect in the balance part of the year. The forward booking trends for the quarter are quite encouraging. In this ensuing peak season more of business class seats will be on offer.

Rupee depreciation versus dollar and Crude oil prices continues to be a cause of concern.

Balance Sheet deleveraging to play out. High costing debt will be repaid through equity infusion and cheaper debt.

The surplus aircraft in the system will be either leased out or sold in quarters to come.

Focus on various avenues of Ancillary revenues should help to boost revenues in the quarters to come.