|
JET AIRWAYS : India's largest and most flied airline company Jet Airways announced its Q3 result for the Financial year 2008 - 2009.
In Q3 FY09 standalone net sales stood at Rs 2,908.9 crore as against Rs 2,426 crore year-on-year. Standalone net loss was Rs 214.2 crore as against net loss of Rs 91.1 crore YoY.
Commenting on the company numbers, Wolfgang Prock-Schauer, CEO, Jet Airways, said Q3 FY09 EBIDTA (Earnings before Interest, Taxes, Depreciation and Amortization) margins stood at 12%. "Q3 net loss has halved to USD 44 million as against USD 88 million in Q2. We are targeting 18-20% margins in coming quarters."
He said the company is cutting down on loss making international routes to help revival
Here is a verbatim transcript of the exclusive interview with Wolfgang Prock-Schauer on CNBC-TV18.
Q: Could you start by taking us through how this quarter was because compared to Q2 your losses have come down from Rs 300 crore odd to Rs 200 crore. How was this quarter in terms of load factors in the EBITDA level performance?
A: The overall market condition in this quarter has been very critical. We had the full impact of the economic slowdown. We had the financial crisis, especially in October-November and on top of that we had the terror attacks in Mumbai in November. So, overall the market conditions were very unfavourable.
Despite the fact that this overall negative market condition have led to a slowdown or a degrade in domestic demand; we were able to halve our losses compared to the second quarter of this financial year. If you recall, we had in the second quarter of this financial year a loss incurred of USD 82 million and this loss now is USD 44 million in Q3.
This loss is about 50-50 on domestic and international operations. So, it is not a satisfactory result. But taking into account the overall environment we are operating in, I think it is a result that shows an improvement compared to the preceding quarter. I think it confirms what we have always said; we are on the way to breakeven in the next financial year. This improvement shows that we are on this path.
Q: It is pretty surprising that the loss is 50-50 on your domestic and international. Some analysts were expecting that at least on the domestic level you could have made an EBITDA breakeven. Could you take us through how the domestic situation was in terms of load factors, and how the EBITDA level losses were, and could you then take us through the international part of the business?
A: What you have seen in domestic overall especially after the terror attacks in Mumbai, we saw quite a drop in demand. So, in Q3 of this financial year, the overall domestic market declined by 18% in total, and naturally every airline in India could feel the impact. The overall load factor is 60% and below.
So that impacted the domestic result, and it wasn’t something that was difficult to foresee really because those were extraordinary circumstances. This is the reason why our domestic results are actually worse as all of us have expected.
So, load factor is down and is in the domestic operations at around 60%, which is clearly about 10% below what we have achieved a year ago.
On the EBITDA level, we are producing a positive EBITDA level. We have an EBITDA level of about 12% in domestic. So, it is positive on EBITDA level. But it is not profitable on PBT or PAT level.
Q: Could you take us through your international part of the business because we did see a lot of route rationalising taking place in Q3?
A: In the international we could see a strong improvement in our results. This was due to route rationalisation. We had cancelled our most loss making route, Amritsar-London. We have also cancelled the route to San Francisco via Shanghai, and we will very shortly, in a couple of days, cancel a route from Bangalore to Brussels. So, we have cancelled the most loss making routes.
We have seen that the business to the Gulf, SAARC region, ASEAN is profitable. What we are doing now is that we are in the process of right sizing our capacity on the North Atlantic to North America; we will only use A-330s, which is a smaller capacity aircraft onto North America. With all these measures, we could improve our results on international operations.
All this route rationalisation has led and will lead to surplus capacity. We have been able to already lease out five longhaul aircrafts, three to Turkish Airlines, two to Gulf Air. And we are in the process of leasing out four more longhaul aircrafts. With that we will be able to eliminate all our surplus capacity.
We lease out these aircrafts on a wet-lease basis, which means this includes our crew as well. We will generate additional income with such kinds of leases.
So, overall international I think we have charted the capacity and we have the right capacity level now. So, I think we are well positioned to achieve breakeven in the coming year.
Q: Could you give us some timeline by when you will be looking at EBITDA level profits and looking at net profits if crude sustains at these levels, ATF prices are there and you manage to clock load factors of around 70%?
A: Let me first say – this quarter is EBITDA positive. Clearly we have a margin of about 12% and this is the margin we had also one-year ago and compared to the preceding quarter, Q2 of this financial year, we were a negative EBITDA. But in this quarter we have achieved a clear positive EBITDA margin which we would like to improve further. Our goal is to achieve something like a 18% to 20% EBITDA margin going forward in the next 1-2 years..
Subscribe to:
Post Comments (Atom)
0 comments for this post