With FY09 net losses of Rs 961 crore, private carrier Jet Airways has fine-tuned its business strategies to come out of the red. Putting the Jet-Kingfisher alliance on fast track and looking at newer markets in the Gulf and SAARC region for a financial cushion is the order of the day at Jet.

Wolfgang Prock-Schaeur, Jet?s CEO told FE , ?We are looking at markets like Jeddah, Riyadh and ASEAN and SAARC regions?. A source at Jet said, Mumbai-Gulf routes are the most lucrative amongst international destinations. Most Gulf routes are short haul of 2.5 hours flying apart from Mumbai-Kuwait which is nearly four hours. Airfare is anything between Rs 18,000-Rs 20,000 above the Rs 8,000 for a similar two-hour flight on Mumbai-Delhi sector. ?Also, despite a downturn, India-Gulf sector is performing good?, he said. Jet?s Q4 revenues from international operations accounted for 56% of its operating revenues of Rs 1,384 crore.

The airline has also leased out nine of its long haul aircrafts to international carriers to eliminate excess capacity and scale up revenues. (The carrier has reported revenues of Rs 2,566 crore for the fourth quarter of FY09.)

On the issue of forex losses against the backdrop of strengthening of the rupee (Rs 47.48 against a dollar as on May 26.), Prock Schaeur said, ?We pay our lease rentals, aircraft maintenance and fuel bills in dollar denominated currency. We have adequately hedged the rupee. Even if the rupee stands appreciated against the dollar, it doesn?t work against us?. Over 40% of transactions are in dollar denominated currency.

However, on the flip side, the company has to fork out over Rs 100 crore to pay their third instalment against purchase of erstwhile Sahara Airlines (now JetLite).

Additionally, Jet has to fund its purchases of aircrafts to the tune of Rs 6,000 crore which has been deferred by 1-2 years.

If Jet cannot garner the money, that will slow down the momentum in the international operations. ?Given the domestic market still needs to see price rationalisation and the overseas operations will take time to stabilise, the company is unlikely to post net profit in a hurry”, says an analyst from IL&FS Investsmart.

Fine-tuning plans

•Jet posted a net profit of Rs 53 cr for the fourth quarter of FY09 against a net loss of Rs 221 crore in the corresponding period a year ago

• FY09 losses surged 47% at Rs 961 crore against Rs 653 in FY08

•$600-million rights issue deffered several times

•Unconfirmed staff to be pared in phases; 500 staff already laid off

•Re-think on contract renewal of expat pilots who are paid nearly 40% more

•No-frills economy class service launched, the fares of which will be 15% lower

•Presence in markets like Jeddah, Riyadh along with Asean and Saarc regions to be enhanced