Jet Airways is India's second largest airline based in Mumbai. It has over 300 daily flights to 74 destinations worldwide. While the airline has seen its losses decrease in recent years, it has not paid dividends since 2007. The aviation industry in India is growing rapidly due to rising incomes and is expected to become the third largest by 2020. Jet Airways leases many of its aircraft through either dry leases, where it pays rent and assumes operating responsibilities, or wet leases, where the lessor maintains the aircraft.

1. Analysis of Annual Report of Jet
Airways
Presented by
(Group 13)
Anjali Sinha
Abhinav Ashesh
Sunny Agarwal

2. Indian Aviation Sector
• India is the 9th largest aviation market in the world
with a size of around US$ 16 billion and is poised to be
the 3rd biggest by 2020.
• Promises huge growth potential due to large and
growing middle class population, rapid economic
growth & higher disposable incomes.
• Experiencing a new era of expansion driven by factors
such as low cost carriers, modern airports, foreign
direct investments in domestic airline.
• Growing steadily registering a growth of 13.8% during
the last 10 years.
• The air transport in India has attracted FDI of over US$
569 million from April 2000 to February 2015.

3. Jet Airways
• Founder Chairperson- Mr. Naresh Goyal
• It started as a commercial air taxy operator on 1992
with a fleet of four leased Boeing 737-300 aircraft from
Malaysia Airlines. In January 1994 a change in the law
enabled Jet Airways to apply for scheduled airline
status, which was granted on 4 January 1995.
• Second largest airline in India based in Mumbai
• It operates over 300 flights daily to 74 destinations
worldwide.
• Market Share- 26.9% of total passenger.
• Subsidiaries Company- JetKonnect & JetLite(Through
acquisition of Sahara Airlines).

4. Financial Highlights
• Net Loss Margin is decreased by 20.70% to
9.26%.
• Operating loss margin is 0.59% as compare to
8.58% of previous year, concluding that operating
cost is decreased or operating income is
increased as compare to previous year.
• Dividend is not given since 2007, a major concern
for shareholders.
• Company is decreasing their losses and in future
years it may comes to breakeven or even profit.

5. Accounting Policies shown in Auditor’s
Report
• Financial Statement are prepared according to:
a. Generally Accepted Accounting Principle in India(GAAP).
b. Accounting Standards under the provision of Companies Act,
2013.
• Revenue recognition are recognised on flown basis, i.e when
services is rendered. Also Lease income on Aircraft given on
operating lease is recognised in P/L Account.
• Depreciation on Tangible Fixed Asset- Straight Line Method
• Contingent Liabilities are not recorded but are disclosed in
Notes to the account.
• Contingent asset neither recorded nor disclosed.
• Foreign Exchange Derivative Instruments- Prudence concept is
used.

6. Management discussion & Analysis of
Financial Condition
• Loss before taxation is ₹181,371 lakhs in 2014-15
as compare to ₹366,797 lakhs in 2013-14,
decrease of 51%.
• Passenger growth of 9.6%
• Operating revenue growth of 10.1%
• Fuel cost decreases by 7%
• Lease rental increase by 8% due to addition of 2
aircraft this year.
• Depreciation decreases by 13% by adopting
different method- useful life of fixed asset.

7. Directors Report on Corporate
Governance
• Company’s Philosophy- Ethics, Code of conduct,
disclosure practices, transparency & prevention of insider
trading are followed at best level.
• Board of Directors Composition- Eight directors on its
board, headed by Mr. Naresh Goyal.
• 6 Board meetings were held and the gap between each is
not more than 2 months.
• Appointment of Independent Director- At least 1/3rd of
the total director should be Independent Director.
• Special Resolution(SR) is passed for creation of mortgage
on 9th August,2014 by postal ballot

8. Reports on Intangibles
• Intangibles consist of two items: Software and
Trademark
• Intangible assets are recognised only if acquired and it
is provides future economic benefits to the enterprise.
• The cost of assets can be measured reliably.
• Recorded at cost and are carried at cost less
accumulated amortisation.
• Amortize on Straight line method: Trademark-10 years,
Software- 36 months
• Balance as on 31/03/2015: Trademark-1,176 lakhs,
Software- 101 lakhs after amortisation.

9. SWOT Analysis
Strength
1 Trusted Airline by the Corporates
2. One of the biggest Indian airline
companies with over 13,000 employees
3. 300 daily flights connecting 75 Indian cities
4.International destinations in nearly 20
countries
Weakness
1. Competition from the LCCs and other
competitors means market share growth
is tough.
2. Presence of other airlines on
international routes making it difficult to
have significant market share.
Opportunity
1. Strongly positioned in the
International routes
2. Has presence in every segment
3. Increasing number of people opting to
travel by airlines
Threats
1. LCCs eating up the market share
2. Rising Fuel Costs and Labour
Costs.
3. Unfavourable Govt policies and
aviation regulations.
SWOT

10. Uniqueness of Financial Report of the
Sector
Aircraft Leases:
1. Dry Lease-
• Aircraft are leased without insurance and crew.
• Monthly rentals paid at a pre-determined rate based on actual
flying hours.
• Rentals are subject to annual escalation as stipulated in respective
lease agreements.
• The Lessee neither has an option to buyback nor has an option to
renew the leases.
2. Wet Lease:
• Operational control and maintenance of aircraft remains the
responsibility of the Lessor.
• Monthly re ntals are receivable on predetermined rates based on
minimum guaranteed utilisation.