Jet Airways sees FY10 numbers worse than FY09’s

With the drop in yields and the rise in fuel costs, the current financial year is likely to make it difficult for Jet Airways to match its own performance in 2009.

“The FY2010 numbers are going to be worse than 2009,” Sudheer Raghavan, chief commercial officer of Jet Airways, said. “The yields have fallen by about 20-25%, though this is not specific to India. Due to the economic situation, there
is a significant impact on business class travellers. The number of people travelling by business class and first class has dropped. These are the segments that provide good yield. People are travelling either by the economy class or low-cost airlines,” he said.

However, he refused to provide the yields the company is accruing at present.
Though average seat factor is about 69%, the airline is likely to take a hit on its performance as yields are discouraging.

According to Raghavan, at the current yield, the seat factor should be about 90% to make operations viable. “But we don’t have to achieve 90%. There is additional revenue coming in from cargo. We have already taken some painful and some strategic decisions to keep operations going. If you want to know about the possibility of more painful decisions, in a business there is scope for such decisions at any point. But, we are focusing on reducing the wastage and not cutting cost at this point,” he said.

Jet had cut its capacities by about 20% as part of its strategy to continue operations without taking  a significant hit on either its topline or bottomline.

Similarly, it had also terminated some of its services, including Shanghai-San Francisco flight. “Our Ebitda was in negative 9% range. But, it has improved to 18%. Earlier from 30%, our market had fallen to 20%. But, we never lost our share in the market in terms of revenue. In July this year, our market share is back to 26.3%,” he said.

Raghavan said domestic travel declined about 5% in the January-June period, but July saw a growth of about 21%, year-on-year.

As per data from the ministry of civil aviation, Jet Airways flew 6.81 lakh passengers in July, up 11.3% from July last year. The company’s low-cost subsidiary JetLite flew 2.66 lakh passengers, seeing numbers fall 1.8% from the same month last year.

Meanwhile, the carrier said it has so far not seen any impact on air travel due to the swine flu epidemic.

“As of now we didn’t see any impact on our business or air travel. Of course, there are a few ticket cancellations, it is very minimal,” Raghavan told reporters.

Jet Airways is also working on a plan to increase traffic by encouraging states to partner it for tourism promotion.

“We have already worked out a deal with the Kerala and Karnataka governments. We are working on a similar plan with the Andhra Pradesh government. The focus would be on identifying the tourism potential in these states and partnering with these states to bring in traffic,” Raghavan said.

“The objective is to build an inflow of tourists from India and neighbouring countries. We have significant number of flights to Europe and US and it will help in developing international tourism,” he added.

Also on Thursday, the airline announced the launch of a new daily flight on the Hyderabad-Dubai sector from August 16. The airline will use a Boeing 737-800 aircraft for this service.

The flight will be Jet Airways’ first international service from Hyderabad and its second daily service to Dubai from South India. The airline currently flies twice daily to Dubai from Mumbai and daily from Delhi and Chennai.

Jet Airways flies to eight destinations in the Gulf region — Kuwait, Bahrain, Muscat, Doha, Abu Dhabi, Jeddah, Riyadh and Dubai.

With agency inputs