Operational efficiencies, focus on customers have proved beneficial for the company
Maintaining its focus on budget passengers and improving its fleet costing has seen Jet Airways record a positive performance. These moves helped the airline consolidate its market share, which grew to around 19 per cent in the June quarter from the 16 per cent level in the previous year. Also, its consolidated revenues for the June quarter were higher than Street estimates with 23 per cent growth over the same period of the previous year.
Domestic flight services were also increased by 7.8 per cent in the quarter under review on an annual basis and international flights by 28.4 per cent, according to analysts. This was largely caused by the significant rise in international flights due to the introduction of such new routes as Mumbai-Johannesburg, along with network collaboration with other foreign airlines, say analysts at ICICI Direct.
However, the interest cost remains a pain for the company, as it has grown 12 per cent. The net debt, at 6.2, has also been a concern, according to analysts at Bank of America-Merrill Lynch. They, however, expect de-leveraging through a series of measures. One of them being the monetisation of the Bandra-Kurla Complex real estate with Godrej Properties, which could provide some respite.
Also, the sale and leaseback of aircraft – following a likely resolution of the Jet-Sahara court case through judicial or an out-of-court settlement – would also be a positive. The streamlining of operations and costs are then likely to help the company fly out of the current turbulence and into clearer skies.