JET AIRWAYS (I) LTD Presentation on Financial Results Q1 FY09 July 29, 2008 1 1 1
Agenda Domestic operating environment Jet Airways performance highlights JetLite performance highlights Outlook 2 2 2
Domestic operating environment 3 3 3
Domestic industry growth Traffic growth rate for the industry reduced from 11.1% in Q4 FY08 4.2% in Q1FY09 Capacity growth rate for the industry reduced from 18.1 % in Q4 FY08 13.4 % in Q1FY09 Per day Feb'08 Mar'08 Apr'08 May'08 Jun'08 Industry Capacity 196,737 194,063 197,160 197,471 188,318 9W Capacity 40,737 39,611 39,626 39,051 38,584 Industry Pax 127,914 119,715 129,688 132,772 116,872 9W Pax 29,664 26,748 27,954 27,256 24,805 Industry losses for FY 2008 estimated at USD 1.0 billion 4 4 4
Domestic yields are trending up 7,500 6,500 6,418 6,158 5,500 5,479 5,598 5,600 4,500 3,500 3,899 3,738 3,749 3,589 3,559 2,500 1,732 1,741 1,849 2,012 2,599 1,500 Mar 08 Apr 08 May 08 Jun 08 Jul 08 (1 15th) Basic Fare YQ Gross Yield without a major impact on traffic 90.0 80.0 74.9 78.1 77.7 71.8 71.4 Seat Factor 70.0 60.0 50.0 40.0 71.4 50.8 74.7 73.9 54.1 50.7 68.1 67.8 45.0 46.4 30.0 1 31st Mar 1 30th Apr 1 31st May 1 30th Jun 1 15th Jul 5 5 S.F % S.F F % S.F J % S.F Y % 5
leading to an increased market share in Q1 Indian Airlines 15.4% Air Deccan 13.5% Combined 27.8% Kingfisher 14.3% Jet Lite 8.2% Combined 29.3% Jet Airways 21.1% MDLR 0.1% Indigo 11.7% SpiceJet 10.4% Paramount 1.2% Go Air 3.9% 6 Source: Press report 6 6
Domestic ATF prices at historic highs 71.6 ATF currently forms close to 50% of airline operating costs for FSC and close to 60% for LCC leaving airlines with very little room to maneuver. Fuel prices in June represent a crude oil price of $140 70.80 66.6 64.74 61.6 21.50 Mio 56.6 56.92 51.6 48.68 51.30 46.6 46.60 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Average Fuel Rate 7 7 7
Performance highlights Q1 FY 09 8 8 8
Financial highlights Q1 FY09 Total Revenues of INR 29.0 Billion (USD 673.7 Million) Up 46% over Q1 FY08 Profit Before Tax of INR 2,191 Million (USD 50.9 Million) Up 343% over Q1 FY08 Profit After Tax of INR 1,434 Million (USD 33.3 Million) Up 365% over Q1 FY08 Revenue Passengers carried 3.15 Million Up 18% from 2.68 Million in Q1 FY08 Achieved Seat Factor of 67.4% Down from 69.1% in Q1 FY08 9 * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 9 9
Summary Q1 FY09 (USD Million) DOMESTIC INTERNATIONAL TOTAL Q1 09 Q1 08 Q1 09 Q1 08 Q1 09 Q1 08 Total Revenues 353.5 380.0 320.1 107.2 673.7 487.2 Of which Op. Revs 346.3 336.8 320.0 107.1 666.2 443.8 Total Expenditure 435.1 347.7 400.5 127.3 835.6 475.0 Of which Fuel 165.1 108.6 192.6 38.7 357.7 147.3 Excess Depr Reversal due to change in method 198.2 14.6 212.8 Profit before Tax 116.7 32.2 (65.8) (20.1) 50.9 12.2 Profit after Tax 33.3 7.6 EBITDAR (33.2) 48.5 (23.7) 6.4 (56.8) 54.9 Margin % 9.6% 14.4% 7.4% 6.0% 8.5% 12.4% * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 The figures include one time impact of change in depreciation policy from WDV to SLM for narrow body aircraft of USD 212.8 Mio. 10 10 10
Key events Addition of 4 aircraft to fleet (2 A330 and 2 ATR) Launched flights to Hong Kong via Mumbai on 14 April Daily flights to Abu Dhabi from Mumbai and Delhi effective April Additional frequencies to Doha (from Kozhikode) and Muscat (from Mumbai) in April Introduced Mumbai Bangkok effective May 7 Flights from Mumbai to San Francisco via Shanghai introduced on June 14 11 11 11
Company operating parameters Q1 FY09 Traffic Parameters Apr 08 Jun 08 Apr 07 Jun 07 Variance % Number of Departures 35,337 29,992 17.8% ASKMs Mio 8,154 4,757 71.4% RPKMs Mio 5,498 3,288 67.2% Passenger Load Factor % 67.4% 69.1% 1.7 points Block Hours 81,229 59,384 36.8% Revenue Passengers (Million) 3.15 2.68 17.7% Revenue per RPKM in INR 4.35 4.71 7.6% Cost per ASKM in INR 3.75 3.15 19.0% Break Even Seat Factor (%) 86.1% 66.9% 19.2 points Cost per ASKM in INR w/o Fuel 1.86 1.89 1.6% Break Even Seat Factor (%) w/o Fuel 42.8% 40.1% 2.7 points Average Gross revenue per passenger in INR* 8,172 6,201 31.8% Average Gross revenue per passenger in USD* 189.9 152.3 24.6% Period end Fleet size 85 62 37.1% Average fleet size during period 82.3 62.3 32.2% Average Head Count Gross 13,403 10,820 23.9% Aircraft Utilisation 10.9 10.6 3.2% * Average revenue per passenger includes Fuel Surcharge and Congestion Surcharge * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 12 12 12
Company P&L Q1 FY09 INR Million INR Million Apr 08 Jun 08 Apr 07 Jun 07 Variance % INCOME Operating Revenues 28,672 18,067 58.7% Non Operating Revenues 320 1,763 81.9% Total Revenues 28,992 19,830 46.2% IN USD Mio 673.7 487.2 EXPENDITURE Employees Remuneration & Benefits 3,552 2,634 34.8% Aircraft Fuel Expenses 15,392 5,996 156.7% Selling & Distribution Expenses 3,174 2,140 48.3% Other Operating Expenses 8,999 5,061 77.8% Aircraft Lease Rentals 1,506 1,532 1.7% Depreciation 1,990 1,328 49.9% Interest 1,346 644 108.9% Total Expenditure 35,959 19,336 86.0% IN USD Mio 835.6 475.0 Excess Depr Reversal due to change in method 9,159 PROFIT BEFORE TAXATION 2,191 495 343.0% IN USD Mio 50.9 12.2 Provision for taxation 757 186 307.2% PROFIT AFTER TAXATION 1,434 309 364.5% IN USD Mio 33.3 7.6 EBITDAR (2,446) 2,235 209.4% IN USD Mio (56.8) 54.9 Margin % 8.5% 12.4% 13 13 * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 13
A. Domestic operations 14 14 14
Domestic operating parameters Q1 FY09 Traffic Parameters Apr 08 Jun 08 Apr 07 Jun 07 Variance % Number of Departures 29,316 27,832 5.3% ASKMs Mio 2,938 2,990 1.8% RPKMs Mio 2,124 2,129 0.3% Passenger Load Factor % 72.3% 71.2% 1.1 points Block Hours 50,221 47,575 5.6% Revenue Passengers (Million) 2.43 2.41 0.6% Revenue per RPKM in INR 6.07 5.61 8.1% Cost per ASKM in INR 5.47 3.56 53.6% Break Even Seat Factor (%) 90.1% 63.4% 26.7 points Average Gross revenue per passenger in INR* 5,666 5,285 7.2% Average Gross revenue per passenger in USD* 131.7 129.8 1.4% * Average revenue per passenger includes Fuel Surcharge and Congestion Surcharge * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 15 15 15
Domestic P & L Q1 FY 09 INR Million INR Million Apr 08 Jun 08 Apr 07 Jun 07 Variance % INCOME Operating Revenues 14,901 13,708 8.7% Non Operating Revenues 313 1,759 82.2% Total Revenues 15,214 15,467 1.6% IN USD Mio 353.5 380.0 EXPENDITURE Employees Remuneration & Benefits 2,066 2,302 10.2% Aircraft Fuel Expenses 7,105 4,421 60.7% Selling & Distribution Expenses 1,973 1,654 19.3% Other Operating Expenses 5,184 3,357 54.4% Aircraft Lease Rentals 1,183 905 30.7% Depreciation 684 1,002 31.8% Interest 527 514 2.6% Total Expenditure 18,723 14,155 32.3% IN USD Mio 435.1 347.7 Excess Depr Reversal due to change in method 8,531 PROFIT BEFORE TAXATION 5,022 1,312 282.8% IN USD Mio 116.7 32.2 EBITDAR (1,427) 1,974 172.3% IN USD Mio (33.2) 48.5 Margin % 9.6% 14.4% * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 16 16 16
B. International operations 17 17 17
International operating parameters Q1 FY09 Traffic Parameters Apr 08 Jun 08 Apr 07 Jun 07 Variance % Number of Departures 6,021 2,160 178.8% ASKMs Mio 5,216 1,767 195.2% RPKMs Mio 3,374 1,158 191.3% Passenger Load Factor % 64.7% 65.6% 0.9 points Block Hours 31,008 11,810 162.6% Revenue Passengers (Million) 0.72 0.26 175.3% Revenue per RPKM in INR 3.28 3.05 7.4% Cost per ASKM in INR 2.78 2.46 13.0% Break Even Seat Factor (%) 84.9% 80.7% 4.2 points Average Gross revenue per passenger in INR* 16,575 14,612 13.4% Average Gross revenue per passenger in USD* 385.2 359.0 7.3% * Average revenue per passenger includes Fuel Surcharge * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 18 18 18
International P & L Q1 FY09 INR Million INR Million Apr 08 Jun 08 Apr 07 Jun 07 Variance % INCOME Operating Revenues 13,770 4,359 215.9% Non Operating Revenues 7 4 71.9% Total Revenues 13,778 4,363 215.8% IN USD Mio 320.1 107.2 EXPENDITURE Employees Remuneration & Benefits 1,486 333 346.7% Aircraft Fuel Expenses 8,287 1,574 426.5% Selling & Distribution Expenses 1,201 486 147.0% Other Operating Expenses 3,814 1,704 123.9% Aircraft Lease Rentals 323 627 48.5% Depreciation 1,306 326 300.4% Interest 819 130 528.3% Total Expenditure 17,237 5,181 232.7% IN USD Mio 400.5 127.3 Excess Depr Reversal due to change in method 628 PROFIT BEFORE TAXATION (2,831) (817) 246.3% IN USD Mio (65.8) (20.1) EBITDAR (1,018) 262 488.8% IN USD Mio (23.7) 6.4 Margin % 7.4% 6.0% * ROE used for conversion: 1 USD = INR 43.035 for Q1 FY09 and 1 USD = INR 40.705 for Q1 FY08 19 19 19
Balance Sheet Jet Airways standalone INR Million As on 30 Jun 08 INR Million As on 31 Mar 08 I SOURCES OF FUNDS Shareholders' Funds 36,575 45,517 Loan Funds 125,857 116,025 Deferred payments towards Jet Lite Investments 4,125 4,125 Deferred Tax Liability 2,347 1,602 TOTAL SOURCES OF FUNDS 168,904 167,269 In USD Million 3,924.8 4,169.2 II. APPLICATION OF FUNDS Net Fixed Assets: 160,170 153,075 Investments 15,078 14,754 Current Assets, Loans & Advances 39,516 35,394 Less: Current Liabilities & Provisions 45,860 35,953 Net Current Assets (6,344) (559) TOTAL APPLICATION OF FUNDS 168,904 167,269 In USD Million 3,924.8 4,169.2 20 20 * ROE used for conversion: 1 USD = INR 43.035 for June 2008 and INR 40.12 for March 2008 20
Major initiatives Network and Revenues Capacity reduction from July of around 12% in domestic Reduction of commissions paid to travel agents from 5% to 0% Increase in the fuel surcharges by Rs. 100 and Rs. 200 based on sector lengths eff. July 16, which will help us recover the July fuel cost increase Increase of INR 4 per kg in the net cargo yield by reduction in discounts offered to agents in the market from July 2008 21 21 21
Network initiatives 22 22 22
Network Initiatives Domestic/International Connectivity with Gulf 1. Recently introduced BOM MCT and BOM AUH flights connect both ways with 15+ domestic operations at BOM. 2. Similarly DEL AUH flights introduced at schedules that maximize domestic and SAARC connectivity. 3. BOM/DXB, DEL/DXB, BOM/RUH and BOM/JED flights also planned with similar schedules 4. BOM/BAH flights rescheduled w.e.f. Winter Schedule to also mirror schedules 23 23 23
JetLite (India) Limited 24
Operational Highlights Passenger increased by 19.4% in Q1 FY 09 as compared to Q1 FY 08 Average seat factor for the Q1 FY 09 is 72.4% vs 73.7% same quarter last year Operating revenue increase by 18.3% in Q1 FY 09 as compared to Q1 FY 08 Loss after tax of Rs. 1,348 million (US$ 31.3 million) in Q1 Fy 09 vs Rs. 1,069 million (US$ 26.3 million) in Q1 FY 08 Aircraft utilization increased by 10% in Q1 FY 09 as compared to Q1 FY 08 25
Operating parameters Q1 FY09 Traffic Parameters Apr '08 Jun '08 Apr '07 Jun '07 Variance % Number of Departures 11,383 10,005 14% ASKMs Mio 1,566 1,413 11% RPKMs Mio 1,133 1,041 9% Passenger Load Factor % 72.4% 73.7% 1 pts. Block Hours 21,172 19,275 10% Revenue Passengers (Million) 1.0 0.8 19% Revenue per RPKM in INR 3.5 3.2 9% Cost per ASKM in INR 3.8 3.1 24% Break Even Seat Factor (%) 111% 97% 13 pts. Cost per ASKM in INR w/o Fuel 1.8 1.7 9% Break Even Seat Factor (%) w/o Fuel 53% 53% 0 pts. Average Gross revenue per passenger in INR* 4,093 4,202 3% Average Gross revenue per passenger in USD* 95 103 8% * Average revenue per passenger includes Fuel Surcharge and Congestion Surcharge * ROE used for conversion: 1 USD = INR 43.04 for Q1 FY09 & INR 40.70 for Q1 FY 08 26
Income statement Q1 FY09 Figs in INR Mio Particulars Apr '08 Jun '08 Apr '07 Jun '07 Variance % INCOME Operating Revenues 4,260.0 3,600.2 18.3% Non Operating Revenues 20.4 22.1 7.6% Total Revenues 4,280.4 3,622.3 18.2% IN USD Mio 99.5 89.0 EXPENDITURE Employees Remuneration & Benefits 456.2 517.4 12% Aircraft Fuel Expenses 3,101.0 1,812.7 71% Selling & Distribution Expenses 291.1 294.9 1% Other Operating Expenses 1,548.7 1,323.5 17% Aircraft Lease Rentals 762.9 697.2 9% Depreciation 14.5 19.8 27% Interest 141.8 26.1 443% Total Expenditure 6,316.1 4,691.6 35% IN USD Mio 146.8 115.3 PROFIT BEFORE TAXATION (2,035.7) (1,069.2) 90% IN USD Mio (47.3) (26.3) Provision for taxation (688.0) PROFIT AFTER TAXATION (1,347.7) (1,069.2) 26% IN USD Mio (31.3) (26.3) * ROE used for conversion: 1 USD = INR 43.04 for Q1 FY09 & INR 40.70 for Q1 FY 08 27
Balance Sheet Q1 FY09 Figs in INR Mio A s o n A s o n 3 0 J u n 0 8 3 1 M a r 0 8 I S O U R C E S O F F U N D S S h a re h o ld e rs ' F u n d s 6,6 0 8 6,6 0 8 L o a n F u n d s 8,5 5 8 8,2 7 1 T O T A L S O U R C E S O F F U N D S 1 5,1 6 5 1 4,8 7 8 I n U S D M illio n 3 5 2.4 3 7 0.8 I I. A P P L I C A T I O N O F F U N D S N e t F ix e d A s s e t s : 1,4 9 6 1,5 0 0 I n v e s tm e n t s 8 8 D e fe rr e d T a x A s s e t s 1,3 1 5 C u rre n t A s s e ts, L o a n s & A d v a n c e s 5,6 8 0 5,0 0 5 L e s s : C u rre n t L ia b ilitie s & P r o v is io n s 8,5 2 5 6,1 0 3 N e t C u rr e n t A s s e t s ( 2,8 4 6 ) ( 1,0 9 8 ) P ro fit & L o s s A c c o u n t 1 5,1 9 2 1 3,8 4 4 T O T A L A P P L I C A T I O N O F F U N D S 1 5,1 6 5 1 4,8 7 8 I n U S D M illio n 3 5 2.4 3 7 0.8 * ROE used for conversion: 1 USD = INR 43.04 for Q1 FY09 & INR 40.13 for plan Q1 FY 08 28
Outlook 29 29 29
Outlook Q2 trends for passengers and yields will reflect low seasonality Reduction in Domestic capacity of around 12% due to commercial reasons Fuel surcharge increased in July, Current YQ for domestic INR 2,350 for sector distance =<750 kms INR 3,100 for distance > 750 kms Have increased Minimum Selling Price in July; looking to further fare increases in August 2008 Oil prices on the downward trend; this could provide potential entry point from a hedging perspective Will begin operations to Dubai in end August and to Saudi Arabia in October 2008; with this, we will complete our International expansion 1 st phase 30 30 30
Thank You 31 31 31
Disclaimer Certain statements in this release concerning Jet Airways future growth prospects are forwardlooking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, intense competition in the aviation business including those factors which may affect our cost advantage, wage increases, our ability to attract and retain professionals, time and cost overruns on various parameters, our ability to manage our international operations, liability for damages, withdrawal of governmental fiscal incentives, political instability, legal restrictions on raising capital, and general economic conditions affecting our industry. Jet Airways may, from time to time, make additional written and oral forwardlooking statements, including our reports to shareholders. Jet Airways does not undertake to update any forward looking statement that may be made from time to time by or on behalf of the company. 32 32 32