Jet Airways Q4FY17 Concall Summary

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Financial Highlights

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  • A net profit of Rs. 438 Crores for full year fiscal 2017 at consolidated level, which makes it the second profitable year in a row
  • Reported the eighth profitable quarter in a row with net profit of Rs. 23 Crores at the consolidated level
  • The consolidated EBITDAR for the full year fiscal 2017 was Rs. 4,425 Crores compared to Rs. 5,341 Crores in fiscal 2016
  • The EBITDA in Q4 fiscal 2017 was Rs. 1,031 Crores as compared to an EBITDAR of Rs. 1,639 Crores in the same period last year
  • Company’s profits during the year and Q4 fiscal 2017 were adversely impacted by the increasing fuel prices, which is evident in the total fuel cost for the company increasing from Rs. 1,071 Crores in Q4 last year to Rs. 1,700 Crores, in same quarter fiscal 2017 is an increase of 58.6%
  • The company has been able to reduce its net debt by Rs. 468 Crores during the quarter and overall for the fiscal 2017 the company has reduced its net debt by Rs. 1,900 Crores
  • Gross revenue increased by 3.1% to Rs. 5,449 Crores in the current quarter from Rs. 5,286 Crores in the same quarter last year and profit after tax was Rs. 37 Crores for Q4 FY17
  • JetLite recorded a loss of Rs. 17.1 Crores in the Q4 ofFY17 as compared to a profit of Rs. 32.6 Crores same period last year
  • Total revenuefor JetLiteincreased by 12.8% to Rs. 301 Crores
  • Comparing Jet Group's consolidated performance between FY17 and FY16 and ASKMs went up by 6.7% as compared to same period last year
  • CASK decreased by 0.2% from Rs. 4.34 in FY16 to Rs. 4.33 in FY17
  • While CASK excluding fuel, reduced from Rs. 3.26 in FY16 to Rs. 3.22 in FY17
  • EBITDA for the year was at Rs. 4,425 Crores in FY17 as compared to Rs. 5,341 Crores in FY16 and profit after tax was Rs. 438 Crores for FY17
  • The debt and liquidity position for the Jet Group as a whole on 31st March 2017, debt on balance sheet stood at Rs. 9,035 Crores or equivalent to US$1.4 Billion
  • The debt balance as on 31st March 2016 was at Rs. 10,813 Crores
  • Total debt comprises of aircraft debt of Rs. 2,809 Crores, equivalent to US $433 Million and over 73% of total debt is denominated in US dollars
  • During the current quarter, net debt reduced by 468 crores 
  • Total reduction in debt by Rs. 1,902 Crores during the year ended 31st March 2017
  • The net debt as on 31st March 2017, stood at Rs. 8,062 Crores as compared to Rs. 8,529 Crores as of 31st December 2016, and Rs. 9,964 Crores as on 31st March 2016
  • Out of the total debt of Rs. 9,000 Crores odd, company has Rs. 2,800 Crores as the aircraft debt and the remaining is in the nature of short-term debt and long-term debt for general corporate purposes
  • The debt due for the next 12 months out of Rs. 9,035 crores of debt is around $200 Million
  • The aircraft debt is Rs. 2,809 Crores equivalent to US $ 433 Million
  • As the average Ruppes per dollar for last year was 65.6 and this year is 67, so not much of a movement and benefit coming out of currency movement
  • The RASK for the current year FY17 stood at Rs. 4.95 as compared to 5.03 same time last year for domestic operations
  • The RASK for current year stood at Rs. 3.83 as compared to Rs. 4.11 last year for international operations
  • JetLite recorded a loss of Rs. 17.1 Crores in the fourth quarter of FY17 as compared to a profit of Rs. 32.6 Crores same period last yar
  • Total revenue of Jet Lite increased by 12.8% to Rs. 301 Crores
  • In fiscal 2017, company had approximately Rs. 145 Crores to Rs. 150 Crores of one-time cost contribution coming primarily on account of the retiral benefit, specially the gratuity benefits
  • During the quarter, company accrued a profit of Rs. 154.6 Crores as per the provisions of the development agreement that was entered into with Godrej Buildcon Pvt. Ltd,
  • Godrej Buildcon Pvt. Ltd. has a net of carrying value of the lease land amounting to Rs. 393.5 Crores and adjusted against advance receipt from the developer amounting to Rs. 365 Crores on completion of development of the plot of land situated in BandraKurla Complex in Mumbai 

Operational Highlights 

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  •  Total cost per ASK increased to 4.40 in the quarter vis-à-vis 4.16 in fourth quarter fiscal 2016
  • The fuel CASK increased in the Q4 this year as Brent crude prices increased from $35.08 a barrel in Q4 fiscal 2016 by 58.6% to $55.48 per barrel in Q4 fiscal 2017
  • ASKMs increased by 11.9% compared to Q4 of last year and RASK in the international market reduced by 10.1% in the current quarter as compared to Q4 of FY16
  • For FY17,JetLite recorded a net loss of Rs. 57.8 crores compared to net loss of Rs. 20.7 crores in FY16 and ASKMs increased by 7.7% compared to Q4 of last year
  • Seat factor improved from 80% in Q4 FY16 to 83.1% in Q4 FY17
  • The seat factors in international market was at 82.2%
  • Passengers carried for the group increased from 25.84 Million in FY16 to 27.15 Million in FY17 which increased by 5.1%
  • Total seat factor is of 81.3%
  • Total RASK during the quarter reduced to 4.20 from 4.38 in fiscal fourth quarter 2016
  • A drop of 4.1% and Yields during the same period also reduced by 3.6%
  • Total cost per ASK increased to 4.40 in the quarter vis-à-vis 4.16 in fourth quarter fiscal 2016
  • The fuel CASK increased in the fourth quarter this year as Brent crude prices increased from $35.08 per barrel in fourth quarter fiscal 2016 by 58.6% to $55.48 per barrel in fourth quarter fiscal 2017
  • CASK excluding fuel continues to reduce with a non-fuel CASK in Q4 fiscal 2017 reducing by 5% to 3.15 against 3.32 in fourth quarter fiscal last year
  • In fiscal 2017, the company has concluded settlements with various employee groups, including pilots and engineering staff and as these settlements were pending for few years, has resulted in certain one-time expense payments like payment of arrears
  • There was also an increase in the retirement benefit liabilities due to increase in base salary and coupled with decreasing G-Sec rate
  • As company increased the additional deployment of aircraft, it increased the number of employees who were directly linked to the scale of operations such as pilots, cabin crew, and certain airport staff
  • The company has continued to focus on reducing debt despite challenging situation in the market place
  • During the quarter, company focused on deploying the B777 which returned in later half of calendar year 2016
  • Subsequent to various routes which upgraded in last year, have identified market for redeployment of these wide-body aircraft to increase utilization of the same
  • Company launched two new routes, which are Chennai-Paris and Bangalore-Amsterdam from winter 2017 and were also adding a third frequency from Mumbai to London
  • Continuing weakness in international market has led to lower demand impacting its average fares lower by 9.1% in fourth quarter fiscal 2017 vis-à-vis fourth quarter fiscal 2016
  • Overall, there was a decline in average fare by 1.6% for the group in fourth quarter FY17 compared to same period last year
  • The economic slowdown of GCC countries resulted in significant weakening of demand and resulted in excess capacity, both in passenger and cargo
  • Despite aggressive sale effort and marketing initiative, the average fares in gulf were lower by 15% in fourth quarter fiscal 2017 as well as in fourth quarter fiscal 2016
  • Jet Airways and its partner Etihad Airways havesigned a ground-breaking agreement with the Government of Maharashtra to promote tourism to the western Indian state
  • Jet Privilege, which is the Frequent Flyer Program, created history at the 10th addition of the Distinguished Customer Loyalty and Customer Experience Awards by winning a record number of six accolades at the highly coveted industry awards
  • Jet Group's consolidated performance started with comparison of the quarter four of fiscal 2017 versus same period fiscal 2016
  • In Q4 FY17, while the total capacity in terms of seats grew by 3.2% for both domestic and international operations put together, total passengers carried by the airline grew by 5.4% versus Q4 FY16
  • Domestic RASK, revenue per km. available seats improved by 4.8% whereas on international front, the RASK dropped by 10.1% in Q4 FY17 versus Q4 FY16
  • The total RASK reduced by 4.1% from Rs. 4.38 in Q4 FY16 to Rs. 4.2 in the current quarter
  • Total cost per ASKM increased to Rs. 4.4 in Q4 FY17 versus Rs. 4.16 in the same quarter last year
  • CASK excluding fuel, reduced by 5% from Rs. 3.32 in Q4 FY16 to Rs. 3.15 in the second quarter
  • Gross revenue increased by 3.1% to Rs. 5,449 Crores in the current quarter from Rs. 5,286 Crores in the same quarter last year
  • The share of total domestic revenues to total revenues was 47% in the quarter in Jet Airways Domestic operation
  • Total domestic revenues were Rs. 2,701 Crores, increaased by 7% as compared to Q4 of last year
  • The passenger revenue from domestic operations increased by 4.8% to Rs. 2,323 Crores in the current quarter
  • The share of international revenues to total revenues was at 53% for the quarter
  • Total factors in the international market was at 82.2%
  • There was a decline in average fare by 1.6% for the group in fourth quarter FY17 versus same period last years
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Business highlights: 

  • The share of total domestic revenues to total revenues was 47% in the quarter
  • Total domestic revenues were Rs. 2,701 Crores up by 7% as compared to Q4 of last year
  • The share of international revenues to total revenues was at 53% for the quarter
  • The passenger revenue from international operations increased by 2.9% to Rs. 2,560 Crores in the current quarter
  • The passenger revenue from domestic operations increased by 4.8% to Rs. 2,323 Crores in the current quarter
  • In Q4 FY17, the company carried 4.9 Million passengers in the domestic market and recording an increase of 2.5% where at the same time in the international market and the airline flew 2.09 Million passengers, recording a growth of 13.1% which achieved a seat factor of 83% in the quarter
  • Domestic and international, passenger carried increase from 6.04 Million in Q4 of FY16 to 6.34 Million in Q4 FY17 which is an increase of 4.9% and ASKMs went up by 8% as compared to Q4 of last year
  • Code share traffic with strategic partner Etihad Airways over Abu Dhabi gateway and other partner airlines now generate over 1800 passenger per day
  • Some of the key enhancements to the domestic and international connectivity from summer 2017, include seven new non-stop routes in domestic market, including Mumbai-Bagdogra, Mumbai-Madurai, Chandigarh-Jaipur, Bangalore-Kozhikode, Delhi-Nagpur, Kolkata-Lucknow, and Dehradun-Srinagar.
  • Four new one-stop flights including Mumbai-Srinagar, Mumbai- Aizawl, Bangalore-Lucknow and Delhi- Silchar have been introduced
  • Three additional frequencies on existing route from Mumbai and seven from Delhi have been introduced
  • The improvement in the numbers of passengers carried result in an increase in consolidated gross revenue by 3.5% to Rs. 5,728 Crores in current quarter from Rs. 5,533 Crores in the same quarter last year

Company Highlights

  • In fiscal 2017, company concluded settlements with various employee groups, including pilots and engineering staff
  • Company has strengthened connectivity towards the Far East, forging successful Codeshare with Hong Kong Airlines, CG Airways, Jet Star Airways, bringing high demand estimations including CG, Bali, Okinawa in Japan as well as Darwin and Auckland in Australia and New Zealand respectively
  • The growing network of 22 Codeshare enabled Jet Airways to offer significantly enhanced globally connectivity and delivering increase in passenger traffic in the coming period
  • For the whole year fiscal 2017, to give a prospective, UK continues to be a very strong market with 85% - 87% plus market

 Growth 

  • During Q4 2017, the ASKs (Available Seat Kilometer) increased by 8% to 13.65 Billion due to increased wide-body deployment
  • Company has recorded a strong traffic growth with number of passengers carried increasing by 5.4% to over 7 Million in Q4 over same period in 2016
  • Yields during the same period also reduced by 3.6%
  • RASK in domestic market improved by 4.8% in the current quarter as compared to Q4 FY16 and ASKM went up by 2.2% compared to Q4 of last year
  • Domestic load factors were at 84.2% and an increase of 2.9% compared to Q4 FY16
  • Domestic average fares improved marginally by 2.2% in fourth quarter fiscal 2017 and same as 2016, despite significant growth in market capacity, largely inducted by competition
  • Continuous weakness in international market led to lower demand impacting its average fares lower by 9.1% in fourth quarter fiscal 2017 and same as 2016
  • In Q4 FY17, total capacity in terms of seats grew by 3.2% for both domestic plus international operations put together
  • Total passengers carried by the airline grew by 5.4% versus Q4 FY16
  • In Q4 FY17, carried 4.9 Million passengers in the domestic market, recording an increase of 2.5% and at the same time in the international market, the airline flew 2.09 Million passengers which recorded a growth of 13.1%
  • Passenger revenue from international operations increased by 2.9% to Rs. 2,560 Crores in the current quarter and ASKMs increased by 11.9% compared to Q4 of last year

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