News: Jet eyes 50% revenues from overseas ops

(DNA 20/09/2006) Mumbai - How do you expect the shareholders of a company, who have seen their wealth erode by about half when the overall benchmark market has doubled, to react? Angry, agitated, and gunning for the management’s blood? Surprisingly, none of the above, if you were present at Jet Airway’s annual general meeting, its second since it went public, on Wednesday.

Intense competition (seat capacity is up 55%), high fuel cost (up 60% on-year), higher rental (+120%), increased selling and distribution cost (+40%) and high staff cost has taken a toll on the company. As a result, against an issue price of Rs 1,100 per share about a year and half back, the shares are now quoting at about Rs 650. But listening to the shareholders no one would have imagined that the counter has faced bloodbath on the bourses. Most reposed faith at the management .

Analysts’ call on the stock is more reflective of its performance on the bourses. Brokerage houses like Citi, SSKI, Enam, and Edelweiss have a sell/reduce/under perform rating on the stock.

The company said being sub-judice, it won’t comment on the blotched Air Sahara deal, on which it is reportedly losing about Rs 30 lakh a day purely as interest cost on the Rs 2,000 crore in the escrow account

Chairman Naresh Goyal offered no time frame as to when the company would raise $800 million by way of FCCB/GDR/ADR/ equity shares to finance its $2.5 billion aircraft acquisition plan.

“We are monitoring market condition and will revive our efforts to raise additional capital as soon as a window of opportunity arises,” he said. The company has raised debt in the interim to meet the pre-delivery payment commitments.

Expressing confidence that it would receive approvals for international flying rights before the airline takes delivery of wide-bodied aircraft next year, Executive Director Saroj Datta said in 2-3 years, half the revenues would come from international operations.

The airline is hoping to connect destinations like U.S, Canada, U.K, Africa, China, Europe, and South East Asia over the next few years.