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Ratio Analysis for Jet
Airways
2/15/2012
K.J. Somaiya Institute Of Management Studies and Research
Prepared By: Akanksha Raje
MMS-B - 158
PreparedFor: Prof.Sonal Ved
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TABLE OF CONTENTS
TABLE OF CONTENTS..........................................................................................2
INTRODUCTION..................................................................................................3
PERFORMANCE OF THE COMPANY.......................................................................3
INFORMATION ABOUT THE AVIATION SECTOR......................................................5
INFORMATION ABOUT THE AVIATION SECTOR
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INTRODUCTION
Jet Airways is the largest Indian airline based out of Mumbai, Maharashtra. It
operates over 400 flights daily to 76 destinations worldwide. Its main hub is
Mumbai, with secondary hubs at Delhi, Chennai,
Cochin, Ahmedabad, Bengaluruand Kolkata. It has an international hub at Brussels
Airport, Belgium. Jet Airways is owned by Naresh Goyal.
Jet Airways started operations on 5th May, 1993 and quickly went on to become
one of the foremost players in the market. With a standard fleet age of 5.53 years,
Jet Airways has one of the youngest aircraft fleet in the world consisting. Jet Airways
presently operates a fleet of 98 aircraft, which also includes:
1. 12 Airbus A330-200 aircraft
2. 20 modern ATR 72-500 turboprop aircraft.
3. 55 classic and next generation Boeing 737-700/800/900 aircraft
4. 11 Boeing 777-300 ER aircraft
It began international operations from Chennai to Colombo in March 2004. The
company is listed on the Bombay Stock Exchange, but 80% of its stock is controlled
by Naresh Goyal (through his ownership of Jet’s parent company, Tailwinds). It has
10,017 employees (as at March 2007).
PERFORMANCE OF THE COMPANY
The Jet Group continues to maintain its leadership position in the Indian aviation
industry, with an estimated market share of 25.4% during the year ended
31stMarch, 2011 (as per DGCA data). Additionally, the specific initiatives
undertaken by the Company, coupled with improvements in infrastructural facilities
and measures implemented by the Ministry of Civil Aviation in the area of air trafficcontrol procedures, has enabled the company to record a better on-time
performance in our domestic operations at 88.4% vs. 76.6% in the previous year.
Despite the sharp increase in the price of Aviation Turbine Fuel (ATF) particularly
during the fourth
quarter of the financial year, the Company was successful in reporting a record
profit before tax of
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Rs.466 million as against a pre-tax loss of Rs.4,676 million in the previous year. The
Company achieved
a seat factor of 78.6% on its system-wide operations and carried 14.7 million
passengers on its services,
which was 22% higher than in 2009-10. The Company achieved an EBITDAR of Rs.24.8 billion, 19%
higher than the previous year.
According to the Directorate General of Civil Aviation (DGCA), the Indian domestic
traffic for the year
continued to show an impressive growth rate of 21%, thereby expanding the
available air traffic market
base of the country.
The international business of Jet Airways continues to be robust. In 2010-11,revenues from international operations accounted for 57.2% of the Company’s total
revenues. They have continued to achieve high seat factors on our internationalroutes. Since the Indian economy is expected to continue to achieve a high GDPgrowth of 8% to 9%, there is no reason to expect a slowdown in the growth of theIndian aviation market. They have therefore planned to induct six additional narrowbody aircraft for deployment on the domestic and regional routes.In a few months from now, they will also get back four of our B777-300ER aircraft on
expiry of the dry
lease agreements with Turkish Airlines. The Company has decided to lease out two
of these aircraft to
Thai International Airways. Following this, a total of five of the Company’s B777-300
ERs will be on
lease to Thai International Airways. They have decided to operate the remaining twoB777-300ER aircraft returned by Turkish Airlines ourselves, thereby upgrading our
services to Hong Kong and the US.
The below graphs highlights the Financial developments of Jet Airways over a period
of 5 years -
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INFORMATION ABOUT THE AVIATION SECTOR
This industry deals with the transport of passenger and cargo from one place to
another using the aerial route. The Public Player in this Industry is Indian Airlines
whereas the Private players include Jet Airways, KingFisher Airlines, Spice Jet, AirDeccan and a few others.
The Market Share of these players can be depicted as –
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This shows that the top 3 players are Air India, Kingfisher and Jet Airways.
India is poised to be among the top five aviation nations in the world in the next 10
years. Currently, India is the 9th largest civil aviation market. The Indian AviationIndustry is exploring opportunities to improve connectivity and is also looking at
enhancing the number of Indian carriers to various countries n the last decade,
domestic air traffic has quadrupled from 13 million to 52 million and international
traffic more than tripled to 38 million. A similar trend is observed in the cargo
sector. The rapidly expanding aviation sector handles 2.5 billion passengers across
the world in a year; moves 45 million tonnes of cargo through 920 airlines, using
4,200 airports and deploys 27,000 aircraft. Today, 87 foreign airlines fly to and from
India and five Indian carriers fly to and from 40 countries. Passengers carried by
domestic airlines during Jan-Nov 2011 were 55.03 million as against 46.81 million
during the corresponding period of previous year thereby registering a growth of
17.6 per cent, according to data released by Directorate General Civil Aviation
(DGCA). The air transport (including air freight) in India has attracted foreign direct
investment (FDI) worth US$ 423.31 million from April 2000 to September 2011,
according to the data provided by Department of Industrial Policy and Promotion
(DIPP).
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The year under review also saw the fruition of several of the Government’s
infrastructure facilities in
support of the aviation industry – the best example being the opening of the new
terminal - T3, in
New Delhi. Green field airports in Hyderabad, Bengaluru and New Delhi and the on-going upgradation
of terminals in Mumbai has been a turning point in the history of India’s civil
aviation industry as for the
first time, the country truly has been able to offer facilities comparable to the best
in the world to
passengers travelling to, from or transiting through, India.
The availability of the modern upgraded facilities has enabled us to consciously
promote the development and use of New Delhi and Mumbai airports as transit
hubs connecting the western markets of Europe, UK and North America with points
in SAARC region and East Asia. Mumbai and New Delhi are fast turning into efficient
hubs for our domestic traffic as well. India now successfully competes as a transit
hub with Dubai, Doha, Singapore, Bangkok and Kuala Lumpur, which are used by
well-known
international airlines.