| Domestic operations accounted for 78% of revenues (Rs. 15,845/US$358 million) as compared to 86 % (Rs. 12,938/US$287 million) in the third quarter of last year, reflecting the growing scale and contribution of the company's international operations. |
| The third quarter is traditionally the peak quarter in the company's fiscal year. The company achieved a domestic seat factor of 70.1% in the quarter ended December 31 versus 72.5% in the same period a year ago, notwithstanding a 40% increase in industry capacity over this period. |
| The company generated pre-tax profit on domestic operations of Rs. 733 million (US$ 16.6 million) versus a pre-tax profit of Rs. 1,301 million (US$ 28.9 million) in the same period a year ago and a profit of Rs. 389 million (US$ 8.5 million) in the immediately preceding quarter. The results for the second and third quarters of this fiscal year include the profit from sale-leaseback of Boeing 737 aircraft. |
| In this quarter, the company generated profit of Rs. 484 million (US$ 10.9 million) from the sale and subsequent lease-back of one Boeing 737 aircraft in October; excluding the sale-leaseback, domestic operations generated a pre-tax profit of Rs. 249 million (US$ 5.6 million). |
| Factors driving domestic performance in the third quarter included: |
| Continued expansion of industry capacity and growth in demand |
| There were approximately 160,000 seats per day offered across all domestic scheduled carriers in December 2006, 25% higher than in April 2006 and approximately 40% higher than in December 2005. The company increased capacity by 15%, consistent with the projected increase in the company's domestic capacity of 12-15% over the coming years. The impact of the recent capacity increase on yields was mitigated to some extent by high demand during the peak travel quarter. Average gross revenue per passenger, inclusive of fuel and congestion surcharges stood at Rs. 5,570, 4.2% higher than the same period a year ago. |
| The number of passenger carried across all scheduled carriers grew by approximately 46% year-on-year. The company carried 2.5 million passengers during the quarter, 11% higher than the same period a year ago. Our full-fare versus discounted fare mix remained stable at approximately 30:70. |
| Increase in fuel costs |
| Fuel costs were higher by Rs. 938 million (US$ 21.2 million) during this quarter versus the same period a year ago. Of this, Rs. 450 million (US$ 10 million) was on account of higher rates and the balance on account of higher block hours. The average fuel rate was Rs. 39.2 per litre vs. Rs. 35.7 per litre a year ago. |
| To reduce the impact of higher fuel costs on account of air traffic congestion in the key metros, an Air Traffic Congestion Surcharge of Rs. 150 per passenger was introduced in December. |
| Increase in other operating costs: |
| Personnel costs were higher mainly due to the increase in average staff numbers; at the company level, headcount increased from 8,472 to 9,780 on account of the expansion in level of operations. New hires among pilots, engineers and cabin crew constituted the substantial part of this increase. |
| Selling and distribution expenses are higher mainly on account of increased passenger revenues, increased advertisement expenses and higher levels of incentives paid to cargo agents. |
| International operations |
| International operations accounted for 22% of total revenues (Rs. 4,455/US$ 101 million) as compared to 14% (Rs. 2,052/US$ 46 million) in the third quarter of last year. |
| The company achieved an average seat factor in international operations of 67.6% for the quarter (62.4% a year ago; 58.9% in the second quarter) and 75% in the month of December alone. Overall, the company generated a pre-tax loss on international operations of Rs. 113 million (US$ 2.6 million) as against a pretax loss of Rs. 347 million (US$ 7.7 million) in the same period last year and a pre-tax loss of Rs 1,114 million (US$ 24.2 million) in the second quarter. Higher passenger yields, higher cargo revenues and continually improving seat factors on key routes contributed to the improved performance of the company's international operations. |
| With effect from January 23, the company will commence daily services to Bangkok from Delhi and Kolkatta. The company will also augment the Amritsar-London service to six flights a week in January, up from the current three flights a week. |
| Outlook |
| The positive financial result in the quarter reflected the peak season impact as well as various network initiatives and improved use of the company's inventory through better yield management. The company expects the fourth quarter to reflect the seasonality inherent in the business. |
| The company is at an inflection point of a major expansion in international operations. Deliveries of the company's orders for ten Boeing 777 and ten Airbus 330 aircraft commence in April 2007; by October 2008, the company's widebody fleet will stand at 22 state-of-the-art aircraft. During the next 12 months, the company expects to add daily flights to North America, East and South Africa and additional points in the Far East. Additionally, the balance five Boeing 737-800 aircraft out of the 10-aircraft order (the first five have already been inducted into our domestic operations) will allow the company to grow domestic capacity in a measured manner and continually upgrade the product and service offering to passengers. |
| Awards and Recognition |
| · In October 2006, Jet Airways was voted "India's Best Airline" at the 17th Annual Travel Awards 2006 function of TTG Travel Asia (Travel Trade Gazette) held at Pattaya, Thailand. The company has won this prestigious award for the third consecutive year and fourth time in the past five years. |
| · In November 2006, Jet Airways won the award for the "Best Full Service Carrier" in India for the fourth consecutive year at the Galileo Express Travel & Tourism Awards 2006. |
| About Jet Airways |
| Jet Airways currently operates a fleet of 60 aircraft with 47 classic and next generation Boeing 737-400/700/800/900 aircraft, 3 Airbus A340-300E aircraft, 2 Airbus A330-200 aircraft and 8 modern ATR 72-500 turboprop aircraft. With an average fleet age of 5.3 years, the airline has one of the youngest aircraft fleets in the world. |
| Jet Airways operates over 330 daily flights to 49 destinations that span the length and breadth of India and beyond, including London Heathrow in U.K., Singapore, Kuala Lumpur in Malaysia, Colombo in Sri Lanka, and Kathmandu in Nepal. The airline plans to extend its international operations to North America, Europe, Africa and Asia in the coming years with the induction of wide-body aircraft into its fleet in 2007. Since inception in May 1993 until end-December 2006, Jet Airways has flown close to 69 million passengers |
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