Annual Report cb smile - Jet Airways

Management’s Discussion and Analysis (contd.)
Employee Remuneration and Benefits
2.10 Expenses with regard to employee remuneration and benefits decreased by 13% to Rs.122,655 lakhs in
Fiscal 2010 from Rs.141,050 lakhs in Fiscal 2009 due to reduction in the average number of personnel employed
from 13,843 to 12,060. This is the result of the Company’s cost cutting measures including freezing recruitment,
freezing salaries and in certain cases salary reductions and other steps taken to rationalize and optimize manpower.
As on 31 st March, 2010, our headcount had reduced to 11,788 v/s 13,843 on 31 st March, 2009.
Selling and Distribution Costs
2.11 Selling and Distribution costs decreased by 10.3% to Rs.98491 lakhs for Fiscal 2010 from Rs.109,817 lakhs for
Fiscal 2009 . This decrease in costs was due to:
● Commission costs decreased by 22% because of reduced passenger and cargo revenues.
● However, Central Reservation System (CRS) expenses and Global Distribution System (GDS) expenses increased
by 22% to Rs.33,161 lakhs for Fiscal 2010 from Rs.27,185 lakhs for Fiscal 2009 mainly due to the increase in
the number of passengers carried particularly on international routes.
Aircraft Rentals
2.12 Aircraft Rentals increased by 16.7% to Rs.83,173 lakhs in Fiscal 2010 from Rs.71,283 lakhs in Fiscal 2009 mainly
on account of:
● The number of leased ATR aircraft increased from 11 to 14
● The induction of 5 leased Boeing 737-800 aircraft during the Financial Year
● The full yearly impact of aircraft sold and leased back during Fiscal 2009
Depreciation
2.13 Depreciation increased by 6.9% to Rs.96,196 lakhs in Fiscal 2010 from Rs.89,981 lakhs in Fiscal 2009 mainly on
account of:
● The full year’s impact of wide-bodied aircraft inducted into the fleet in Fiscal 2010
● The induction of one owned Boeing 737-800 aircraft during Fiscal 2010
Interest Expense
2.14 Interest Expense increased by 34.5% to Rs.99,301 lakhs in Fiscal 2010 from Rs.73,803 lakhs in Fiscal 2009, largely
due to the increase in working capital requirements.
Exceptional Items
2.15 These include gains of Rs.7,045 lakhs due to Mark-to-Market valuation of outstanding derivative contracts
compared to a loss of Rs.10,073 lakhs in Fiscal 2010. Exceptional items in Fiscal 2009 included CENVAT credit of
Rs.34,993 lakhs and a credit of Rs.91,587 lakhs due to the change in the method of depreciation, and there were
no corresponding items in Fiscal 2010.
Profit / (Loss) before Taxation
2.16 Loss before taxation is Rs.46,755 lakhs in Fiscal 2010 compared to Rs.46,962 lakhs in Fiscal 2009.
Profit / (Loss) after Taxation
2.17 Loss after taxation was Rs.46,764 lakhs in Fiscal 2010 compared to Rs.40,234 lakhs in Fiscal 2009.
3. Initiatives
3.1 The Company has continued major initiatives to respond to the market situation and the challenging environment.
The Company continues to control and monitor costs in all areas of its operations.
3.2 The Company introduced a new all–economy product “Jet Airways Konnect”, with a product offering that effectively
competes with other “no frills” domestic airlines. The Company maintains the same level of care of its guests in
Jet Airways Konnect flights as it does in its full service operations.
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