COMPANY PROFILE

Jet Airways (India) Ltd.

REFERENCE CODE: 17C981D1-FFB2-4C30-8DBA-08AE8AB1F7DF

PUBLICATION DATE: 31 Mar 2015
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Jet Airways (India) Ltd.

TABLE OF CONTENTS

TABLE OF CONTENTS
Company Overview..............................................................................................3
Key Facts...............................................................................................................3
SWOT Analysis.....................................................................................................4

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Jet Airways (India) Ltd.

Company Overview

COMPANY OVERVIEW
Jet Airways (India) Ltd. (Jet Airways or the company) is a provider of air passenger transportation
and cargo services. The company operates daily flights to 76 destinations, including the US, Canada,
the UAE, Singapore, Malaysia, and the UK. The company is headquartered in Mumbai, India and
employed 13,256 people as on March 31, 2014.
The company recorded revenues of INR194,453 million ($3,227.9 million) during the financial year
ended March 2014 (FY2014), an increase of 0.2% over FY2013. The operating loss of the company
was INR232,780 million ($3,864.1 million) in FY2014, as compared to an operating profit of INR31,959
million ($530.5 million) in FY2013. The net loss of the company was INR41,286.7 million ($685.4
million) in FY2014, as compared to a net loss of INR7,798 million ($129.4 million) in FY2013.

KEY FACTS
Head Office

Jet Airways (India) Ltd.

Siroya Centre
Sahar Airport Road
Andheri (East)
Mumbai 400 099
IND

Phone

91 22 6121 1000

Fax

91 22 6121 1950

Web Address

http://www.jetairways.com/EN

Revenue / turnover 194,453.0

(INR Mn)
Financial Year End

March

Employees

13,256

Bombay Stock
Exchange Ticker

532617

National Stock
Exchange of India
Ticker

JETAIRWAYS

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Jet Airways (India) Ltd.

SWOT Analysis

SWOT ANALYSIS
Jet Airways is a provider of air passenger transportation and cargo services. Vertically integrated
operations allow the company to cater to a wide range of customer needs and conveniences, which
in turn give a competitive edge over its competitors. However, the growing number of low cost and
low fare airlines and the increasing number of private jets could impact the companys domestic
market share.
Strengths

Weaknesses

Vertically integrated operations give a

competitive edge over competitors
Robust fleet base and strong network
portfolio improves operational margins
Information technology and e-Commerce
initiatives enhances the operational
performance

Negative margins affect the future growth

plans

Opportunities

Threats

Robust outlook for the Indian airlines

industry
Growing tourism industry to boost revenues
Strategic alliance with Etihad Airways would
enhance customer base

Intense competition in the aviation industry

impacts the domestic market share
Statutory regulations incurs additional costs
and impacts the operating margins

Strengths

Vertically integrated operations give a competitive edge over competitors

Jet Airways offers integrated operations to its customers. It offers passenger operations, cargo
operations and also leases aircrafts. In the passenger segment, the company operates daily flights
to 56 domestic destinations and 20 international destinations. International destinations covered by
the company include Abu Dhabi, Bahrain, Bangkok, Brussels, Colombo, Dammam, Dhaka, Doha,
Dubai, Hong Kong, Jeddah, Kathmandu, Kuwait, London Heathrow, Muscat, Newark, Paris, Charles
de gaulle, Riyadh, Sharjah, Singapore and Toronto.
The company also offers other services, including online ticket booking and reservation, online
check-in services, wheelchair assistance, kiosk check-in and mobile ticketing. The company provides
on ground services such as check-in options, airport lounges, coach services and bus services.
Furthermore, Jet Airways also transports cargo across the world. In FY2014, it transported 207,660

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SWOT Analysis

tons of cargo. Further in March 2015, Jet Airways started dedicated freighter operations to a number
of international and domestic destinations, including Bangalore, Hong Kong, Hanoi and Singapore.
Thus, vertically integrated operations allow the company to cater to a wide range of customer needs
and conveniences, which in turn gives a competitive edge over its competitors.
Robust fleet base and strong network portfolio improves operational margins
Jet Airways has a strong operational portfolio with strong fleet base and network operations. As of
March 2014, the company operated a fleet of 101 aircraft, which include eight Airbus A330-200
aircraft, four Airbus A330-300 aircraft, 15 ATR 72-500 Turboprop aircraft and three ATR72-600
aircraft, 61 Next Generation Boeing 737-700/800/900/900ER aircraft, and 10 Boeing 777-300ER
aircraft. With an average fleet age of 5.3 years, the company has one of the youngest aircraft fleets
in the world.
In addition, the company has a strong network base across the globe. It covers 20 international
destinations and operates flights to and from 56 destinations in India. It has codeshare agreements
with 18 airlines, including Air Canada, All Nippon Airways (ANA), Brussels Airlines, Etihad Airways,
Kenya Airways, Malaysia Airlines, Qantas, Thalys, KLM, Garuda Indonesia, Emirates, Virgin Atlantic,
Alitalia, American Airlines, South African Airways, Air France, and United Airlines.
Thus, the company's robust fleet base and strong network portfolio enables Jet Airways to improve
its operational margins by effective utilization of its asset base.
Information technology and e-Commerce initiatives enhances the operational performance
The company enters its third decade of operations and it has strengthened its focus on creating
differentiating products and services to stay ahead in a competitive and challenging environment.
For instance, Jet Airways introduced the option of booking JetEscapes Holidays on its website to
provide leisure travelers a seamless experience in booking all inclusive holiday packages at their
convenience. The company also launched India's first native airline mobile application for Windows,
Android, iPhone and BlackBerry phones. These applications provide passengers with options to
book tickets, manage their JetPrivilege account, check flight status, and avail special offers.
Furthermore, the company also aims to use new technology to increase its ancillary revenue and
also leverage cloud computing which entails several benefits such as infrastructure flexibility,
scalability, cost control and improved performance and productivity. Thus, these initiatives enhance
the operational performance and on a whole increase the customer base.

Weaknesses

Negative margins affect the future growth plans

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SWOT Analysis

The net margins of the company recorded negative figures in FY2014, despite growth in its revenues.
For instance, Jet Airways recorded operating loss of INR232,780 million ($3,864.1 million) in FY2014.
Similarly, the net loss was INR41,286.7 million ($685.4 million) in the same period. Moreover, the
operating and net margins of the company stood at -11.9% and -21.2%, respectively in FY2014.
Therefore, consistent negative margins for the company would impact shareholder's confidence in
the company thus affecting its future growth plans.

Opportunities

Robust outlook for the Indian airlines industry

The Indian airlines industry has produced some excellent growth well into double digits in recent
years, this growth faltered marginally in 2012 before recovering in 2013. The market is expected to
produce high growth rates in the forecast period. According to MarketLine (a unit of Informa), the
Indian airlines industry generated total revenues of $16,089.9 million in 2013, representing a
compound annual growth rate (CAGR) of 20.8% between 2009 and 2013.
Furthermore, the performance of the industry is forecast to remain strong, with an anticipated CAGR
of 12.3% for the 2013-18 periods, which is expected to drive the industry to a value of $28,721.3
million by the end of 2018. Jet Airways is one of the largest air service companies in India offering
air passenger transportation, cargo, and other related services. The company operates daily flights
to 56 domestic destinations. In FY2014, the company transported 17.2 million passengers through
173,723 departures with an average passenger load factor of 78.2%. Thus the company is well
positioned to exploit the growing end market to enhance its revenues and markets share in the
coming periods.
Growing tourism industry to boost revenues
The global tourism industry is booming which could boost the demand for the company's services.
According to the World Tourism Organization (UNWTO), the number of international tourists (overnight
visitors) reached 1,138 million in 2014, 51 million more than in 2013. With an increase of 4.7%, this
is the fifth consecutive year of above average growth since the 2009 economic crisis. Geographically,
the Americas and Asia Pacific regions registered 7% and 5%, growth in tourist arrivals, respectively.
In addition, Europe and Middle East each grew at a modest rate of 4%.
Moreover, the UNWTO forecasts international tourism to grow by 3% to 4% in 2015. In terms of
region, Asia and the Pacific is expected to grow by (4% to 5%), the Americas by (4% to 5%), followed
by Europe with (3% to 4%). In addition, the decline in the global oil prices is expected to further lower
transport costs and boost economic growth by lifting purchasing power and private demand in oil
importing economies.
Jet Airways provides air transportation services within India as well as overseas. The company
operates daily flights to 56 domestic destinations and 20 international destinations. International

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SWOT Analysis

destinations covered by the company include Abu Dhabi, Bahrain, Bangkok, Brussels, Colombo,
Dammam, Dhaka, Doha, Dubai, Ho Chi Minh City, Hong Kong, Jeddah, Kathmandu, Kuwait, London
Heathrow, Muscat, Newark, Paris Charles de gaulle, Riyadh, Sharjah, Singapore and Toronto. The
growing global tourism coupled with the company's presence in more countries could thus help it to
boost its revenues and margins.
Strategic alliance with Etihad Airways would enhance customer base
The company has expanded its reach into new markets through strategic agreements. For instance,
Jet Airways forged a strategic alliance with Etihad Airways in 2013, wherein Etihad Airways planned
to invest $370 million for a 24% stake in Jet Airways. Etihad Airway's overall wider commitment to
Jet Airways also included an injection of additional $220 million to create and strengthen a
wide-ranging partnership between the two carriers. For the required agreement Etihad Airways paid
$70 million to purchase Jet Airways' three pairs of Heathrow slots through a sale and lease back
agreement. Jet Airways continues to operate flights to London utilizing these slots. Further, an
amount of $150 million is planned to be invested by Etihad Airways by way of a majority equity
investment in Jet Airways' frequent flyer program, 'Jet Privilege'.
This partnership will offer a wider consumer choice to the Indian traveler by connecting 23 cities
across India to a significantly enhanced international market. This in turn, would facilitate further
tourism inflows to the country and help promote trade and commerce. The Jet Airways-Etihad deal
is also expected to bring cost synergies in fleet acquisition, maintenance, joint-purchasing opportunities
for fuel, spare parts, equipment and catering supplies, as well as external services such as insurance
and technology support. Other areas of co-operation include joint training of pilots, cabin crew and
engineers, as well as maintenance of common aircraft types and consolidation of guest loyalty
programs.
Thus, strategic alliance with Etihad Airways would help the company to optimize its operations as
well as expand into new markets and increase its customer base.

Threats

Intense competition in the aviation industry impacts the domestic market share
The competition in the airline industry has been intensified with the emergence of low cost carriers
(LCCs) in the East Asian region. The low fare charged by these budget airlines makes Jet Airways'
airline operation less competitive. In the long-haul market, the company faces competition from local
operators in most geographical areas, including Middle East and Asia. In the medium-haul market,
low-cost carriers have established strong market positions and continue to grow. Jet Airways faces
stiff competition from SpiceJet, Malaysian Airline, IndiGo, and Air India. Moreover, the recent policy
reversal by the Indian Government allowing foreign stakes in airline companies in India may result
in the launch of new airlines in the industry, further increasing the competition. For instance, Vistara,
a partnership between Singapore Airlines and the Tata Group commenced operations in January

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SWOT Analysis

2015. Thus, the growing number of low cost and low fare airlines and the increasing number of
private jets could impact Jet Airways domestic market share.
Statutory regulations incurs additional costs and impacts the operating margins
As an airline operator, the company undertakes operations based on the stipulations of statutory
regulations relating to airline operations. Jet Airways is required to conduct passenger operations
and cargo operations on international routes in accordance with the stipulations of international
agreements. These stipulations include treaties, bilateral agreements, and the decisions of the
International Air Transport Association (IATA). A violation of specific laws and regulations by the
company could result in the imposition of fines and penalties.
The company is also subject to numerous statutory environmental protection regulations. These
regulations are imposed on airline companies with regard to issues such as aircraft emissions of
greenhouse gases, use of environmentally polluting substances and their disposal, and energy
usage at major offices. Jet Airways shoulders a considerable cost burden in order to adhere to such
statutory regulations. If the current regulations are strengthened or if new regulations, such as
environmental taxes, are introduced, the company has to incur large additional costs, which would
impact the Jet Airways' operating margins.

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