Jet Airways SWOT Analysis. Returns to profit in fourth quarter, but big challenges ahead
Key Points:
STRENGTHS: Jet grasps the nettle, restructuring finally paying off;
WEAKNESSES: Brand confusion; losing patience with JetLite?;
OPPORTUNITIES: Growth options limited to short-haul; Some consolidation likely in 12-18 months;
THREATS: Ongoing economic weakness and competitive tension.
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Jet Airways has come off another difficult financial year, but an extensive cost reduction programme launched in the second half of its latest financial year is bearing some early fruit with a return to profit in the fourth quarter. This SWOT Analysis reviews Jet Airways' internal strengths and weaknesses and its external opportunities and threats.
STRENGTHS: Jet grasps the nettle, restructuring finally paying off
Financial discipline (not before time): Jet Airways' management is finally executing an effective restructuring plan after some haphazard attempts over the past 18 months to come to grips with a rapidly changing market.
Encouragingly, the airline generated a USD10.4 million net profit in the fourth quarter to 31-Mar-2009, turning around a USD55.1 million net loss in the previous corresponding period and a USD44 million loss in the third quarter. This was to some extent driven by exceptional items such as income from sub-leasing aircraft, changes to depreciation charges and tax credits. Full year losses reached USD79.3 million in the 12 months ended 31-Mar-2009, following a USD63.1 million loss in the previous corresponding period.
The improved fourth quarter operating result was achieved through an extensive cost cutting programme that included network restructuring, the deferral of aircraft deliveries for the next 1-2 years, rationalisation of personnel costs, restructuring of aircraft leases, debt...