Cover.p65

HSBC Securities

and Capital Markets

(India) Private

Limited

52/60, Mahatma

Gandhi Road, Fort,

Mumbai 400 001

Tel : 91 22 2267 4921

Fax: 91 22 2263 1984

UBS Securities

India Private

Limited

Floor,

Hoechst House

Nariman Point

Mumbai 400 021

Tel : 91 22 2286 2000

Fax : 91 22 2281 4676

Citigroup Global

Markets India

Private Limited

Floor, Bakhtawar

229 Nariman Point

Mumbai 400 021

Tel : 91 22 5631 9982

Fax : 91 22 5631 9803

Email:

DSP Merrill Lynch

Limited

Mafatlal Centre,

Floor,

Nariman Point

Mumbai 400 021

Tel : 91 22 2265 1702

Fax : 91 22 2262 1187

Kotak Mahindra

Capital Company

Limited

3rd Floor, Bakhtawar

229 Nariman Point

Mumbai 400 021

Tel : 91 22 5634 1100

Fax: 91 22 2282 6632

REGISTRAR TO THE OFFER

Karvy Computershare Private Limited

Unit: Jet

Karvy House, 46, Avenue 4, Street No.1

Banjara Hills, Hyderabad 500 034

Tel.: 91 40 2331 2454

Fax: 91 40 2331 1968/2343 1551

Email: jet@karvy.com

C M K

OFFER PROGRAM

BID/OFFER OPENED ON : FEBRUARY 18, 2005

BID/OFFER CLOSED ON : FEBRUARY 24, 2005

Deutsche Bank

Bank

Investment

TABLE OF CONTENTS

PAGE

DEFINITIONS AND ABBREVIATIONS .............................................................................................................................. i

GLOSSARY OF CERTAIN INDUSTRY, TECHNICAL AND FINANCIAL TERMS ........................................................ viii

CERTAIN CONVENTIONS; FINANCIAL AND MARKET DATA ................................................................................... xi

FORWARD-LOOKING STATEMENTS ................................................................................................................................ xii

CURRENCY OF PRESENTATION ........................................................................................................................................ xiii

RISK FACTORS ....................................................................................................................................................................... xiv

SUMMARY .............................................................................................................................................................................. 1

THE OFFER ............................................................................................................................................................................. 5

SUMMARY FINANCIAL INFORMATION ........................................................................................................................ 6

RECENT DEVELOPMENTS .................................................................................................................................................. 10

GENERAL INFORMATION .................................................................................................................................................. 12

CAPITAL STRUCTURE ......................................................................................................................................................... 27

OBJECTS OF THE OFFER ..................................................................................................................................................... 33

INDUSTRY ............................................................................................................................................................................... 36

BUSINESS ................................................................................................................................................................................. 41

HISTORY AND CERTAIN CORPORATE MATTERS ........................................................................................................ 61

SELECTED FINANCIAL INFORMATION.......................................................................................................................... 63

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS ..................................................................................... 67

MANAGEMENT..................................................................................................................................................................... 99

OUR PROMOTERS AND GROUP COMPANIES............................................................................................................... 109

RELATED PARTY TRANSACTIONS ................................................................................................................................... 124

REGULATIONS AND POLICIES .......................................................................................................................................... 125

GOVERNMENT APPROVALS .............................................................................................................................................. 129

OUTSTANDING LITIGATION ............................................................................................................................................. 131

MATERIAL DEVELOPMENTS............................................................................................................................................. 152

DIVIDEND POLICY ................................................................................................................................................................ 153

OTHER REGULATORY DISCLOSURES .............................................................................................................................. 154

TERMS OF THE OFFER ........................................................................................................................................................ 156

OFFER PROCEDURE ............................................................................................................................................................. 160

BASIS FOR OFFER PRICE ..................................................................................................................................................... 179

STATUTORY AND OTHER INFORMATION .................................................................................................................... 182

MAIN PROVISIONS OF ARTICLES OF ASSOCIATION OF JET AIRWAYS (INDIA) LIMITED ................................ 188

FINANCIAL INFORMATION............................................................................................................................................... 213

STATEMENT OF TAX BENEFITS ....................................................................................................................................... 265

SUMMARY OF SIGNIFICANT DIFFERENCES AMONG INDIAN GAAP, IFRS AND U.S. GAAP .......................... 271

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ............................................................................. 280

DECLARATION ...................................................................................................................................................................... 282

DEFINITIONS AND ABBREVIATIONS

Term Description

Abacus Abacus Distribution System Pte. Ltd., a GDS.

AGM Annual general meeting.

Airbus AIRBUS S.A.S.

Air Deccan A unit of Deccan Aviation Private Limited.

Air India Air India Limited.

Air Sahara Sahara Airlines Limited.

Allocation Amount The amount payable by a Bidder on or prior to the Pay-in Date after

deducting any Bid Amounts that may already have been paid by such Bidder.

Allotment Issue or transfer, as the context requires, of the Equity Shares pursuant to

the Offer to the successful Bidders.

Allottee The successful Bidder to whom the Equity Shares are/have been issued or

transferred.

Amadeus Amadeus Global Travel Distribution, a GDS and technology provider, serving

travel and tourism industries.

Articles/ Articles of Association The Articles of Association of the Company.

AS Accounting Standards as issued by the Institute of Chartered Accountants

of India.

ASEAN Association of Southeast Asian Nations.

ATR Avions de Transport Régional.

Auditors Deloitte Haskins & Sells, Chartered Accountants, and Chaturvedi & Shah,

Chartered Accountants (member of Nexia International), the joint statutory

auditors of the Company under Indian GAAP.

Banker(s) to the Offer Citibank, N.A., Deutsche Bank AG, The Hong Kong and Shanghai Banking

Corporation Limited, Kotak Mahindra Bank Limited, IDBI Bank Limited, ICICI

Bank Limited, HDFC Bank Limited, Standard Chartered Bank and Abu Dhabi

Commercial Bank Limited.

Bid An indication to make an offer made during the Bidding Period by a

prospective investor to subscribe to the Equity Shares of the Company at a

price within the Price Band, including all revisions and modifications thereto.

Bid Amount The highest value of the optional Bids indicated in the Bid cum Application

Form and payable by the Bidder on submission of the Bid in the Offer.

Bid/Offer Closing Date The date after which the Syndicate will not accept any Bids for the Offer,

which shall be notified in a widely circulated English national newspaper, a

Hindi national newspaper and a Marathi newspaper.

Bid cum Application Form The form in terms of which the Bidder shall make an offer to subscribe to/

purchase Equity Shares and which will be considered as the application for

allotment/transfer of the Equity Shares in terms of the Red Herring Prospectus.

Bid/Offer Opening Date The date on which the Syndicate shall start accepting Bids for the Offer,

which shall be the date notified in a widely circulated English national

newspaper, a Hindi national newspaper and a Marathi newspaper.

Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red

Herring Prospectus.

Bidding/Offer Period The period between the Bid/ Offer Opening Date and the Bid/ Offer Closing

Date inclusive of both days and during which prospective Bidders can submit

their Bids.

Board of Directors/ Board The Board of Directors of the Company or a committee thereof.

Boeing The Boeing Company.

Book Building Process/Method Book building route as provided in Chapter XI of the SEBI Guidelines, in

terms of which this Offer is being made.

BPCL Bharat Petroleum Corporation Limited.

BRLMs Book Running Lead Managers to the Offer, comprising Deutsche Equities

India Private Limited, HSBC Securities and Capital Markets (India) Private

Limited, UBS Securities India Private Limited, Citigroup Global Markets India

Private Limited, DSP Merrill Lynch Limited and Kotak Mahindra Capital

Company Limited.

BSE The Stock Exchange, Mumbai.

CAGR Compounded annual growth rate.

CAN/Confirmation of Allocation Note The note or advice or intimation of allocation of Equity Shares sent to the

Bidders who have been allocated Equity Shares after discovery of the Offer

Price in accordance with the Book Building Process.

CBDT Central Board of Direct Taxes.

CDSL Central Depository Services (India) Limited.

CEGAT Central Excise and Gold Appellate Tribunal, a tax appellate authority in India,

now known as the Customs, Excise and Service Tax Appellate Tribunal or

CESTAT.

CIAL Cochin International Airport Limited.

Citigroup Citigroup Global Markets India Private Limited.

CMIE Centre for Monitoring Indian Economy.

Common Law Agreement The Common Law Trade Marks User Agreement dated October 15, 2000

between the Company and Jet Enterprises, as amended.

Company or Jet Airways Jet Airways (India) Limited, a public limited company incorporated under the

Companies Act.

Companies Act The Companies Act, 1956, as amended from time to time.

Cut-off Price Any price within the Price Band finalized by the Company in consultation

with the BRLMs. A Bid submitted at the Cut-off Price by a Retail Individual

Bidder is a valid Bid at all price levels within the Price Band.

Depositories Act The Depositories Act, 1996, as amended from time to time.

Depository A depository registered with SEBI under the SEBI (Depositories and

Participants) Regulations, 1996, as amended from time to time.

Depository Participant A depository participant as defined under the Depositories Act.

iii

Designated Date The date on which funds are transferred from the Escrow Account to the

Public Offer Account after the Prospectus is filed with the RoC, following

which the Board of Directors shall allot and/or transfer Equity Shares to

successful Bidders.

Designated Stock Exchange NSE.

Deutsche Equities Deutsche Equities India Private Limited.

Directors The directors of the Company from time to time.

Draft Red Herring Prospectus The Draft Red Herring Prospectus issued in accordance with Section 60B of

the Companies Act, which does not contain complete particulars on the

price at which the Equity Shares are offered and the size (in terms of value)

of the Offer. It was filed as the Red Herring Prospectus with the RoC at least

three days before the Bid/Offer Opening Date. It is the Prospectus upon

filing with the RoC.

DSPML DSP Merrill Lynch Limited.

EGM Extraordinary general meeting.

Employee Reservation Portion The portion of the Offer being 1,200,000 Equity Shares available for allocation

to Employees who are Indian Nationals, are based in India and are physically

present in India on the date of submission of the Bid cum Application Form.

Employee A permanent employee or a director of the Company or Tail Winds who are

Indian Nationals, are based in India and are physically present in India on

the date of submission of the Bid cum Application Form.

Equity Shares Equity Shares of the Company of face value of Rs.10 each, unless otherwise

specified in the context thereof.

Escrow Account Account opened with Escrow Collection Bank(s) and in whose favour the

Bidder will issue cheques or drafts in respect of the Bid Amount when

submitting a Bid.

Escrow Agreement Agreement dated February 17, 2005, entered into by the Company, the

Registrar, the BRLMs, the Syndicate Members, the Company, the Selling

Shareholder (acting through the Company, its duly constituted attorney) and

the Escrow Collection Banks, for collection of the Bid Amounts and, where

applicable, refunds of the amounts collected to the Bidders.

Escrow Collection Bank(s) The banks which are clearing members and registered with SEBI as Bankers

to the Issue at which the Escrow Account for the Offer will be opened.

ESOP Employee stock option plan.

ESPS Employee stock purchase scheme.

FCNR Account Foreign Currency Non Resident Account.

FDI Foreign direct investment in India.

FEMA Foreign Exchange Management Act, 1999, as amended from time to time, and

the regulations framed thereunder.

FERA Foreign Exchange Regulation Act, 1973, now repealed.

FII/Foreign Institutional Investor Foreign Institutional Investor (as defined under SEBI (Foreign Institutional

Investors) Regulations, 1995), registered with SEBI under applicable laws in

India.

Financial Year/fiscal/Fiscal/FY The 12 months ended March 31 of a particular year.

FIPB Foreign Investment Promotion Board, Ministry of Finance and Company

Affairs, Government of India.

First Bidder The Bidder whose name appears first in the Bid cum Application Form or

Revision Form.

Fresh Issue Issue of 14,245,111 Equity Shares at the Offer Price by the Company under

this Prospectus.

FVCI Foreign Venture Capital Investor, as defined and registered with SEBI under

the SEBI (Foreign Venture Capital Investor) Regulations, 2000, as amended.

Galileo Galileo International, Inc., a GDS.

GDP Gross Domestic Product.

GIR Number General Index Registry Number.

HAL Hindustan Aeronautics Limited.

HPCL Hindustan Petroleum Corporation Limited.

HSBC HSBC Securities and Capital Markets (India) Private Limited.

HUF Hindu Undivided Family.

IDBI Industrial Development Bank of India Limited.

IDFC Infrastructure Development Finance Company Limited.

IFC International Finance Corporation.

IFRS International Financial Reporting Standards.

Indian Airlines Indian Airlines Limited.

Indian National As used in the context of the Employee Reservation Portion, a citizen of

India as defined under the Indian Citizenship Act, 1955, as amended, who is

not an NRI.

Indian GAAP Generally accepted accounting principles in India.

Industrial Policy The industrial policy and guidelines issued thereunder by the Ministry of

Industry, Government of India from time to time.

I.T. Act Income Tax Act, 1961, as amended.

IOC Indian Oil Corporation Limited.

Jetair Jetair Private Limited.

Jet Enterprises Jet Enterprises Private Limited.

KMCC Kotak Mahindra Capital Company Limited.

Margin Amount The amount paid by the Bidder at the time of submission of his/her Bid,

which is between 0% to 100% of the Bid Amount.

MAT Minimum Alternate Tax.

Memorandum/Memorandum of

Association The Memorandum of Association of the Company.

MoF Ministry of Finance and Company Affairs, Government of India.

NAV Net Asset Value.

Net Offer The Offer of Equity Shares other than Equity Shares included in the Employee

Reservation Portion.

NG Group Mr. Naresh Goyal, Tail Winds Limited and their respective affiliates, as defined

in our Articles.

N.I. Act Negotiable Instruments Act, 1881, as amended.

Non Institutional Bidders All Bidders that are not eligible Qualified Institutional Buyers or Retail

Individual Bidders and who have bid for Equity Shares for an amount more

than Rs.50,000.

Non Institutional Portion The portion of the Net Offer being up to 2,410,020 Equity Shares available

for allocation to Non Institutional Bidders.

Non Residents All Bidders who are not NRIs or FIIs and are not persons resident in India.

NRE Account Non Resident External Account.

NRI/ Non Resident Indian A person resident outside India, as defined in FEMA and who is a citizen of

India or a Person of Indian Origin, each term as defined under the Foreign

Exchange Management (Transfer or Offer of Security by a Person Resident

Outside India) Regulations, 2000.

NRO Account Non-Resident Ordinary Account.

NSDL National Securities Depository Limited.

NSE National Stock Exchange of India Limited.

OCB/Overseas Corporate Body A company, partnership, society or other corporate body owned directly or

indirectly to the extent of at least 60% by NRIs, including overseas trust(s)

in which not less than 60% of beneficial interest is irrevocably held by NRIs

directly or indirectly as defined under Foreign Exchange Management

(Deposit) Regulations, 2000, as amended. OCBs are not allowed to invest in

this Offer.

OCB Regulations Foreign Exchange Management (Withdrawal of General Permission to Overseas

Corporate Bodies (OCBs) Regulations, 2003.

Offer for Sale The offer for sale by the Selling Shareholder of 3,021,690 Equity Shares of

Rs.10 each at the Offer Price.

Offer Collectively, the Fresh Issue and the Offer for Sale.

Offer Price Rs.1100 per Equity Share.

PAN Permanent Account Number.

Pay-in Date Bid Closing Date or the last date specified in the CAN sent to Bidders, as

applicable.

Pay-in-Period This term means (i) with respect to Bidders whose payment has not been

waived by the Syndicate and are therefore required to pay the maximum Bid

Amount into the Escrow Account, the period commencing on the Bid/Offer

Opening Date and extending until the Bid/Offer Closing Date, and (ii) with

respect to Bidders whose payment has been initially waived by the Syndicate

and are therefore not required to pay the Bid Amount into the Escrow Account

on or prior to the Bid/Offer Closing Date, the period commencing on the Bid/

Offer Opening Date and extending until the Pay-in Date.

Price Band Price band of a minimum price (floor of the price band) of Rs.950 and the

maximum price (cap of the price band) of Rs.1,125 (both inclusive), including

revisions thereof.

Pricing Date The date on which Company in consultation with the BRLMs has finalized

the Offer Price.

Promoters Tail Winds Limited and Mr. Naresh Goyal.

Prospectus The Prospectus to be filed with the RoC containing, inter alia, the Offer

Price that is determined at the end of the Book Building Process, the size of

the Offer and certain other information.

Public Offer Account Account opened with the Bankers to the Offer to receive monies from the

Escrow Account for the Offer on the Designated Date.

Qualified Institutional Buyers or QIBs Public financial institutions as defined in Section 4A of the Companies Act,

FIIs registered with SEBI, scheduled commercial banks, mutual funds registered

with SEBI, venture capital funds registered with SEBI, foreign venture capital

investors registered with SEBI, state industrial development corporations,

insurance companies registered with Insurance Regulatory and Development

Authority, provident funds with minimum corpus of Rs.250 million and pension

funds with minimum corpus of Rs.250 million. (QIBs as defined herein for

this Offer specifically exclude multilateral and bilateral development financial

institutions).

QIB Portion The portion of the Offer being at least 9,640,081 Equity Shares of Rs.10 each

available for allocation to QIBs.

RBI The Reserve Bank of India.

Red Herring Prospectus The Red Herring Prospectus dated February 8, 2005 issued in accordance

with Section 60B of the Companies Act, which did not have complete

particulars on the price at which the Equity Shares are offered and size of

the Offer. The Red Herring Prospectus was filed with the RoC at least three

days before the opening of the Offer and is the Prospectus after filing with

RoC.

Registered Office of our Company SM Centre, Andheri Kurla Road, Andheri (East), Mumbai 400 059, India.

Registered User Agreement The Trade Marks Registered User Agreement dated October 15, 2000 between

us and Jet Enterprises, as amended.

Registrar to the Offer Registrar to the Offer, in this case being Karvy Computershare Private Limited.

Retail Individual Bidder(s) Individual Bidders (including HUFs and NRIs) who Bid for Equity Shares for

an amount not more than Rs.50,000, in any of the bidding options in the

Offer.

Retail Portion The portion of the Offer being up to 4,016,700 Equity Shares of Rs.10 each

available for allocation to Retail Bidder(s).

Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the

Bid Price in any of their Bid cum Application Forms or any previous Revision

Form(s).

RoC Registrar of Companies at Mumbai, Maharashtra.

SAARC South Asian Association for Regional Cooperation.

vii

SCRA Securities Contracts (Regulation) Act, 1956, as amended from time to time.

SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to time.

SEBI The Securities and Exchange Board of India, constituted under the SEBI Act.

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to

time.

SEBI Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000, issued by SEBI

effective from January 27, 2000, as amended from time to time, including

instructions and clarifications issued by SEBI from time to time.

Selling Shareholder Tail Winds Limited.

Stock Exchanges NSE and BSE.

Syndicate The BRLMs and the Syndicate Members.

Syndicate Agreement Agreement dated February 17, 2005, entered into among the BRLMs, Syndicate

Member(s), the Selling Shareholder (acting through the Company, its duly

constituted attorney) and the Company in relation to the collection of Bids

in the Offer.

Syndicate Member(s) Kotak Securities Limited and Karvy Stock Broking Limited.

Tail Winds Tail Winds Limited, a company incorporated in the Isle of Man.

TRS/ Transaction Registration Slip The slip or document issued by the Syndicate to the Bidder as proof of

registration of the Bid.

UBS UBS Securities India Private Limited.

Underwriters The BRLMs and the Syndicate Member(s).

Underwriting Agreement Agreement dated February 27, 2005 entered into among the BRLMs, the

Syndicate Member(s), the Company and the Selling Shareholder (acting

through the Company, its duly constituted attorney).

U.S. Exim Export Import Bank of the United States.

U.S. GAAP Generally accepted accounting principles in the United States.

VCF Venture Capital Fund as defined and registered with SEBI under the SEBI

(Venture Capital Fund) Regulations, 1996, as amended from time to time.

viii

GLOSSARY OF CERTAIN INDUSTRY, TECHNICAL AND FINANCIAL TERMS

Term Description

AAI Airports Authority of India.

AIC Represents any or all aeronautical information circular(s) issued by the DGCA

from time to time.

AIC No. 4 Aeronautical Information Circular No. 4/2004 dated March 1, 2004, issued by

the DGCA, as amended, modified, replaced or supplemented from time to

time.

AME Aircraft maintenance engineer.

Aircraft utilization Represents the average number of block hours operated per day per aircraft

for the total aircraft fleet.

Air Taxi Operator A domestic airline, permitted by DGCA to operate non-scheduled flights

APEX Advance Purchase Excursion Fare, a scheme offering lower fares than our

normal published fares.

APU Auxiliary power unit that is used to provide power to the aircraft on the

ground.

ASA Air services agreement between countries.

ATC Air Traffic Control.

ATF Aviation Turbine Fuel.

Available Seat Kilometers, or ASKM Represents the aircraft seating capacity multiplied by the number of kilometres

the seats are flown.

Average stage length Represents the average number of kilometres flown per flight.

BCAS Bureau of Civil Aviation Security of India.

Block hours Refers to the elapsed time between an aircraft leaving an airport gate and

arriving at an airport gate.

Boeing 737 A series of aircraft manufactured by Boeing and comprising the Boeing 737

Classic and Boeing 737 NG variants.

Boeing 737 Classic The series of aircraft comprising the Boeing 737-300, Boeing 737-400 and

Boeing 737-500 aircraft

Boeing 737 NG The series of aircraft comprising the Boeing 737-600, Boeing 737-700, Boeing

737-800 and the Boeing 737-900 aircraft

Breakeven load factor Represents the Passenger Load Factor that will result in Net Passenger

Revenues being equal to Total Expenses less cargo and Non-operating

Revenues.

BSP Billing Settlement Plan provided by IATA as a part of its passenger agency

programme.

CAR The civil aviation requirements issued by the DGCA from time to time.

C Check A block “C” check in accordance with the MPD and includes all inspections

up to and including those required every 4,800 Flight Hours, 4,000 cycles

(defined as one take-off and landing) and 18 months.

Cargo tonnage The total cargo carried on an aircraft expressed in metric tons.

Cash EPS Net profit after tax and annualized return on preference capital before

depreciation, provision for obsolescence divided by total number of Equity

Shares.

CFM International CFM International SA.

CFM56 Engines A type of engine manufactured by CFM International which are fitted on our

Boeing 737 aircraft.

Club Premiere/CP The business class section on our Boeing 737 aircraft.

CRS Computerised Reservation System.

CRS costs Cost paid to CRS service provider.

Chicago Convention Convention on Civil Aviation signed in Chicago on December 7, 1944, as

amended from time to time.

D Check The maintenance shop visit which shall include but not be limited to

accomplishment of a block C6/8 year check in accordance with the applicable

appendix of the MPD, all lesser checks, passenger cabin refurbishment

(including lavatories and galleys) and strip and repainting of the complete

fuselage, empennage, wings and pylons.

DGCA Directorate General of Civil Aviation of India.

EBIT Profit before interest and taxation excluding Non-operating Revenues and

excluding any adjustments to profit as required under SEBI Guidelines.

EBITDA Profit before interest, taxation, depreciation and amortization excluding Non-

operating Revenues and excluding any adjustments to profit as required under

SEBI Guidelines.

EBITDAR Profit before interest, taxation, depreciation, amortization and aircraft rentals

(fixed), excluding Non-operating Revenues and excluding any adjustments to

profit as required under SEBI Guidelines.

EPS Earnings per Equity Share.

EBITDAR margin Calculated by dividing EBITDAR for the relevant period by Operating

Revenues for such period.

Flight hours Refers to the time elapsed from the moment the wheels of an aircraft leave

the ground on a take-off until the wheels of an aircraft next touch the ground.

FAA Federal Aviation Administration of the United States.

FTT Foreign travel tax.

GDS A global distribution system.

General and Administrative Expenses Consists of expenses related to inflight and other passenger amenities,

communication costs, travelling and subsistence, rent, rates and taxes, repairs

and maintenance, electricity, provision for bad and doubtful debts, directors’

sitting fees, loss on scrapping of fixed assets, loss on sale of fixed assets,

loss on exchange rate difference and other miscellaneous expenses.

GSA General sales agent.

IATA International Air Transport Association.

IATT Inland Air Travel Tax.

ICAO International Civil Aviation Organization.

LIBOR The London Interbank Offer Rate, as applicable to the U.S. Dollar.

MoCA Ministry of Civil Aviation, Government of India.

MPD The DGCA approved maintenance planning document.

MTOW Maximum take-off weight as certified by DGCA.

Net Passenger Revenues Represents the Passenger Revenues net of commisions paid to travel agents

and GSAs.

Non-operating Revenue Represents revenue from interest income, profit from sale of assets such as

aircraft and engines and foreign exchange gains.

Operating Revenues Represents Passenger Revenues, revenues from excess baggage and cargo

and Other Income.

Other Income Represents revenue from ticket cancellation and handling charges paid by

the Government of India for PSF (being collected from passengers) and for

IATT (collected from passengers until January 9, 2004).

Other Operating Expenses Represents the aggregate of variable rent, aircraft maintenance, landing and

navigation charges and other airport charges, insurance costs and General

and Adminstrative Expenses.

PSF Passenger service fee, a tax levied by the Government of India on passengers.

Passenger Load Factor Revenue Passenger Kilometres expressed as a percentage of Available Seat

Kilometres.

Passenger Revenues Represents the revenue recognized when transportation is provided to a

passenger or when no claim for refund has been made by a passenger on an

unused ticket for a period of two years.

Revenue Passenger Kilometers, or RPKM Represents the number of kilometres flown by revenue passengers.

Revenue passengers Represents the total number of fare paying passengers flown on all flight

segments (excluding passengers redeeming their frequent flyer miles).

RONW Return on Net Worth.

SABRE Sabre Inc.

Sabre GDS Sabre Travel Information Network, a GDS.

Scheduled Airline An airline permitted by DGCA to operate scheduled flights

SITA Societe International de Telecommunications Aeronautiques.

Total Expenses Represents the aggregate of employee remuneration and benefit, aircraft fuel

expenses, selling and distribution expenses, aircraft lease rentals, depreciation,

interest and Other Operating Expenses.

Total Revenues Represents the aggregate of Operating Revenues and Non-operating Revenues.

Turnaround time The time between two continuous flights with the same aircraft.

Y Class / Y The economy class section on our aircraft.

Yield Net Passenger Revenue earned per kilometer flown.

CERTAIN CONVENTIONS; FINANCIAL AND MARKET DATA

All references to “we”, “our”, “us”, “the Company” or “our Company” or words of similar import in this Prospectus are

to Jet Airways.

Unless stated otherwise, the financial data in this Prospectus is derived from our financial statements prepared and

restated in accordance with Indian GAAP, the Companies Act and SEBI Guidelines beginning on page 214 of this

Prospectus. We have no subsidiaries. Accordingly, financial information relating to us is presented on a non-consolidated

basis. Our fiscal year commences on April 1 and ends on March 31. In this Prospectus, any discrepancies in any table

between the total and the sums of the amounts listed are due to rounding.

There are significant differences between Indian GAAP, IFRS and U.S. GAAP; accordingly, the degree to which the

Indian GAAP financial statements included in this Prospectus will provide meaningful information is entirely dependent

on the reader’s level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian

accounting practices on the financial disclosures presented in this Prospectus should accordingly be limited. We and the

Selling Shareholder have not attempted to quantify the impact of these differences on the financial data included herein,

and we and the Selling Shareholder urge you to consult your own advisors regarding such differences and their impact

on our financial data.

All reference to “fiscal”, “Fiscal” “FY” or “Financial Year” in this Prospectus refers to the 12 months ending on March 31.

All references to “India” in this Prospectus are to the Republic of India together with its territories and possessions, and

all references to the “US” or the “U.S.” or the “U.S.A.”, or the “United States” are to the United States of America

together with its territories and possessions. All references to the “Government” are to the Government of India, unless

otherwise indicated.

All references to “Rupees” or “Rs.” are to Indian Rupees, the official currency of India. All references to “U.S.$”, “U.S.

Dollar” or “US Dollars” are to United States Dollars, the official currency of the United States of America.

For additional definitions, please see the section entitled “Definitions and Abbreviations” and “Glossary of Certain

Industry, Technical and Financial Terms” beginning on pages i and viii, respectively, of this Prospectus.

Industry and market data used throughout this Prospectus has been obtained from industry publications, Government of

India sources and internal company reports. Industry publications generally state that the information contained in those

publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not

guaranteed and their reliability cannot be assured. Although we believe industry, market and government data used in

this Prospectus is reliable, it has not been independently verified. Similarly, internal company reports, while believed by

us to be reliable, have not been verified by any independent sources.

xii

FORWARD-LOOKING STATEMENTS

This Prospectus contains certain “forward-looking statements”. These forward looking statements can generally be identified

by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “may”, “objective”, “plan”,

“project”, “shall”, “will”, “will continue”, “will pursue” or other words or phrases of similar import. Similarly, statements

that describe our objectives, strategy, plans or goals are also forward-looking statements.

All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual

results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that

could cause actual results to differ materially from our expectations include, among others:

l general economic and business conditions;

l our ability to successfully implement our strategy and our growth and expansion plans;

l factors affecting travel, including business travel;

l increasing competition in the airline industry;

l increases in fuel, maintenance and repair costs and insurance premia;

l increases in employee costs, including wage levels of pilots, flight crew and engineers;

l manufacturers’ defects or mechanical problems with our aircraft or incidents caused by human error;

l changes in the value of the Indian rupee and other currencies, in particular, the U.S. Dollar;

l cyclical or seasonal fluctuations in our operating results;

l fares that we are able to obtain from different sectors;

l changes in laws and regulations that apply to the aviation industry;

l changes in fiscal, economic or political conditions in India;

l social or civil unrest or hostilities with neighboring countries or acts of international terrorism;

l epidemics or infectious outbreaks affecting travel; and

l changes in the foreign exchange control regulations, interest rates and tax laws in India.

For further discussion of factors that could cause our actual results to differ, please see the sections entitled “Risk

Factors”, “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

beginning on pages xiv, 41 and 67, respectively, of this Prospectus. In the light of inherent risks and uncertainties, the

forward-looking statements, events and circumstances discussed in this Prospectus might not occur and are not guarantees

of future performance. Neither our Company, the Selling Shareholder, their respective directors and officers, any Underwriter

nor any of their respective affiliates has any obligation to update or otherwise revise any statements reflecting circumstances

arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not

come to fruition. In accordance with SEBI requirements, for purposes of the Offer, our Company and the BRLMs will

ensure that investors in India are informed of material developments relating to our business until such time as the grant

of listing and trading permission by the Stock Exchanges.

xiii

CURRENCY OF PRESENTATION

This Prospectus contains translations of certain U.S. Dollar amounts into Rupees (and certain Rupee amounts into U.S.

Dollars) that have been presented solely to comply with the requirements of Clause 6.8.4 of the SEBI (Disclosure and

Investor Protection) Guidelines, as amended (“SEBI Gudelines”). Investors should not rely on such translated amounts.

These convenience translations should not be construed as a representation that those Rupee or U.S. Dollar amounts

could have been, or could be, converted into U.S. Dollars or Rupees, as the case may be, at any particular rate, the rates

stated below, or at all. Except as otherwise stated in this Prospectus, all translations from Rupees to U.S. Dollars (and all

translations from U.S. Dollars to Rupees) contained in this Prospectus have been based on the Interbank market mid rates

as taken from Bloomberg as on September 29, 2004, which was Rs.46.01 = U.S.$1.00.

The following table sets forth, for each period indicated, information concerning the number of Rupees for which one U.S.

Dollar could be exchanged at the Interbank market mid rates on the last business day of the particular period. The column

titled average in the table below is the average of the Interbank market mid rates for each day in the period.

Period Period End Average High Low

Rs. Rs. Rs. Rs.

Fiscal 2000 43.62 43.34 43.66 42.42

Fiscal 2001 46.62 45.69 46.88 43.63

Fiscal 2002 48.82 47.68 48.83 46.56

Fiscal 2003 47.47 48.40 49.05 47.47

Fiscal 2004 43.60 45.94 47.47 43.60

Six months ended September 30, 2004 45.95 45.53 46.47 43.54

Source: Bloomberg

The Interbank market mid rate as on February 25, 2005 was Rs.43.70 = U.S.$ 1.00.

xiv

RISK FACTORS

An investment in our Equity Shares involves a high degree of risk. You should carefully consider all of the information

in this Prospectus, including the risks and uncertainties described below, before making an investment in our Equity

Shares. If any of the following risks actually occur, our business, financial condition and results of operations could

suffer, the trading price of our Equity Shares could decline, and you may lose all or part of your investment.

Internal Risk Factors

We operate in a very competitive industry.

There is substantial competition in the airline industry. As the Indian airline industry is further liberalized, we expect

competition to intensify as new entrants begin to compete against us, our existing competitors further expand their

operations and we enter new markets where we compete with well established competitors.

Competition with existing competitors in the market has been, and we believe will continue to be, intense. Currently, our

principal competitors in the domestic sector include Indian Airlines, a Government-owned company, together with its

subsidiary, Alliance Air, and Air Sahara and Air Deccan, two privately owned companies. We may face competition from

other new competitors in the near future. According to published reports, other enterprises are contemplating entering the

domestic aviation market.

Certain of our competitors, including Government-owned companies, may have significantly greater resources than those

available to us. Our existing and future competitors or new entrants into the market may undercut our fares in the future,

increase capacity on their routes in an effort to increase their market share or attempt to conduct low-fare or “no frills”

airline operations. For example, according to published reports, Indian Airlines is planning to undertake an expansion of

its aircraft fleet and is awaiting Government approval for such expansion. In such an event, we cannot assure you that

our level of market share, yields and volume of passenger traffic, and revenues would not be adversely affected.

Our market position will depend upon effective marketing initiatives and our ability to anticipate and respond to various

competitive factors affecting the industry, including pricing strategies by competitors. Any failure by us to compete

effectively, including in terms of pricing or providing high-quality innovative services, could have a material adverse

effect on our results of operations.

We also compete with other airlines for labour in skilled positions such as pilots, aircraft maintenance engineers (“AMEs”),

technicians and in-flight crew. Our competitors may offer wage and benefit packages that are more attractive than our

wage and benefit packages. If we are unable to attract and retain qualified employees, particularly skilled personnel such

as pilots that have been trained by us, our business and expansion plans may be adversely affected.

We also compete with other airlines for access to airport facilities, parking bays for aircraft and prime time departure slots.

An inability to lease, acquire or access airport infrastructure, facilities or services on reasonable terms or at preferred

times may have an adverse impact on our operations.

We have only a limited number of suppliers for our aircraft and engines. Any problem with these aircraft, whether

real or perceived, could significantly harm our business.

One of the key elements of our business strategy is to operate limited types of aircraft, with each type having similar

equipment. Operating a fleet of similar aircraft with similar equipment leads to cost savings because maintenance issues

are simplified, spare parts and inventory requirements are reduced, scheduling is more efficient and training costs are

lowered. Operating limited types of aircraft also allows our employees to become knowledgeable about the airframe and

engine, thereby increasing their efficiency and productivity.

As of the date of this Prospectus, 34 aircraft in our total fleet of 42 aircraft are Boeing 737s, while eight aircraft are ATR

72-500s. We chose the Boeing 737 because of its reliability, advanced technology, and fuel efficiency. We use the ATR

72-500s primarily for short haul flights. We have entered into lease agreements for seven additional Boeing 737-800

aircraft expected to be delivered in 2005 for lease terms ranging between approximately six and seven years. One such

aircraft has recenlty been delivered to us and will be inducted into service after it is refurbished for international

operations and upon receipt by us of final DGCA approval to operate the aircraft. In December 2004, we paid Boeing a

refundable security deposit aggregating U.S.$900,000 to acquire ten additional Boeing 737-800 aircraft with CFM56-7B24

engines. The expected date of delivery of such aircraft is between January 2006 and October 2007. Definitive purchase

agreements have been executed. As per the terms of the purchase agreements, we are required to make pre-delivery

payments to Boeing progressively. Closer to the delivery dates of each aircraft, we will finalize definitive financing

arrangements for these aircraft. The entry into financial arrangements in connection with these purchase agreements is

also subject to the Company obtaining corporate approvals and such necessary regulatory approvals as may be required.

All of our Boeing 737 aircraft are equipped with engines manufactured by CFM International, S.A. (“CFM International”),

with the Boeing 737 Classic series (Boeing 737-300, 737-400 and 737-500) using one type of CFM engine and the Boeing

737 NG series (Boeing 737-600, 737-700, 737-800 and 737-900) using another type of CFM engine. Our ATR 72-500s are

equipped with engines manufactured by Pratt & Whitney Canada Corp.

Our dependence on these limited types of aircraft and engines makes us particularly vulnerable to any problems that

might be associated with such aircraft or the engines. Our business would be significantly harmed if a design defect or

mechanical problem with such aircraft or engines were discovered, causing our aircraft to be grounded while any such

defect or problem is being corrected, assuming it could be corrected at all. The DGCA could also suspend or restrict the

use of our aircraft in the event of any actual or perceived mechanical or design problems while it conducts its own

investigation. Our business would also be significantly harmed if the public avoids flying our aircraft due to an adverse

perception of the Boeing 737 or the ATR 72-500 aircraft because of safety concerns or other problems, whether real or

perceived, or in the event of an accident involving a Boeing 737 or an ATR 72-500 aircraft.

A number of factors could adversely affect our ability to obtain additional Boeing 737 or the ATR 72-500 aircraft,

including any accidents, industrial unrest or natural calamity or other event affecting the manufacturing facilities of The

Boeing Company (“Boeing”) or Avions de Transport Régional (“ATR”) and thereby affecting their ability to fulfill their

contractual obligations or to do so in a timely manner. We could experience similar problems in the procurement of

engines manufactured by CFM International and by Pratt & Whitney Canada Corp.

If these or other parties are unable to perform their contractual obligations to deliver aircraft or engines to us, we would

have to approach another supplier for aircraft or engines of a similar seat configuration and mission capability. Airbus is

currently the only other manufacturer from which we could acquire alternate aircraft to our Boeing 737 fleet. If we were to

purchase aircraft from Airbus, we would lose the fleet commonality benefits described above. We cannot also assure you

that any such aircraft would have the same operating advantages as the Boeing 737. In addition, we cannot assure you

that we could acquire such aircraft in the same time frame as currently expected or at comparable prices. We would incur

substantial transition costs, including costs associated with retraining our employees and replacing our manuals. Our

operations could also be harmed by the failure or inability of Boeing, CFM International, ATR or Pratt & Whitney Canada

Corp. to provide sufficient parts or related support services on a timely basis.

We rely on maintaining high daily aircraft utilization for our revenues. High aircraft utilization also makes us

vulnerable to delays. If an aircraft becomes unavailable, we may suffer greater damage to our service, reputation and

profitability than airlines with larger fleets.

One of the key elements of our business strategy is to maintain high daily aircraft utilization, which represents the

average number of Block hours operated per day per aircraft for the total aircraft fleet. High daily aircraft utilization allows

us to enhance the efficiency of our operations and generate more revenue from our aircraft and is achieved in part by

reducing turnaround time at airports so that we can fly more hours on an average in a day. Aircraft utilization is reduced

by delays resulting from the following factors, most of which are beyond our control:

l security requirements;

l air traffic and airport congestion;

l adverse weather conditions, especially in North India during winter months;

l defects or mechanical problems with our aircraft;

l unavailability of cockpit and in-flight crew;

l strikes or work stoppages; and

xvi

l acts of third parties upon which we rely for requirements such as fueling and maintenance.

In addition, the expansion of our business to include new destinations and more frequent flights on existing routes could

increase the risk of delays, to the extent the expansion increases our exposure to congested airports, longer flight

durations or air traffic congestion. Delays could reduce our daily aircraft utilization and, in turn, limit our ability to achieve

and maintain profitability as well as damage our reputation. Further, high aircraft utilization increases the risk that once an

aircraft falls behind schedule during the day, it could remain behind schedule during the remainder of that day, which

could result in disruption in operating performance leading to passenger dissatisfaction as a result of delayed or cancelled

flights or missed connecting flights.

Our business is dependent on the Mumbai airline market and a reduction in demand in this market could harm our

business. Also, any interruptions or disruptions at the Mumbai airport or at any of our other hubs could harm our

business.

Currently, 1,008 of our 1,924 weekly flights have Mumbai as either their destination or origin. In addition, we park 19 of

our fleet of 42 aircraft at the Mumbai airport overnight. Mumbai is the primary base of our operations. As a result, we

remain dependent on the Mumbai airport and airline market. A small part of our workforce at Mumbai is unionized. Our

business could be harmed by any circumstances causing a reduction in traffic to and from the Mumbai area, such as

adverse changes in economic conditions, work stoppages or slowdowns by our workforce in Mumbai, negative public

perception of the city, significant price increases in airport access costs and fees imposed on passengers or the impact of

terrorist attacks, strikes or other disturbances in the city or in the State of Maharashtra or neighboring States.

In addition to Mumbai, the other hubs of our operations are Delhi, Bangalore, Chennai and Kolkata. Our operations at

each of these hubs include flights that gather and distribute traffic from markets in the geographic region surrounding the

hub to other major cities. Any interruptions or disruptions at these airports could also harm our business.

If we commence services to additional international destinations, we will face different risks than those associated

with our domestic operations.

We commenced operation of regular scheduled services to destinations in neighbouring countries, such as Colombo, Sri

Lanka, and Kathmandu, Nepal, in March 2004 and May 2004, respectively, pursuant to the Government’s permission

allowing private sector domestic carriers to fly to certain SAARC countries. On January 21, 2005 the DGCA issued AIC

No. 2/2005 entitled “Guidelines for Operation of Indian Scheduled Carriers on International Routes” and invited scheduled

Indian carriers to apply for the allocation of traffic rights on international routes. Accordingly, we have applied for traffic

rights on certain international routes to operate daily air services for the IATA Summer Season 2005 and the IATA Winter

Season 2005/2006 commencing March 28, 2005 and October 30, 2005, respectively.

We have been allocated seven weekly frequencies between India and Heathrow, England. We have also been recently

allocated certain traffic rights on the India-Malaysia and India-Singapore routes with effect from the IATA Summer

Schedule 2005. We have been permitted to operate seven Boeing 737-800 flights per week or 980 seats per week to

Malaysia. We have also been permitted to operate seven Boeing 737-800 flights per week on the Mumbai-Singapore

sector or 980 seats per week. We have also been permitted to operate three services per week on the India (Mumbai) –

Belgium (Brussels) – USA (New York) sector with effect from IATA Summer Schedule 2005. With respect to increased

entitlements for some of the aforementioned routes and entitlements for other international routes, the Government is

expected to shortly notify its decisions on the allocation of entitlements among the four scheduled carriers (that is, Air

India, Indian Airlines, Air Sahara and us). We will thereafter be able to finalize our plans relating to the actual deployment

of our aircraft, the number of frequencies that we will operate on various routes as well as conclude associated arrangements.

In our international operations, we will face different risks than those associated with our domestic operations. We have

only limited experience in operating flights to international destinations. In particular, for long haul destinations, we would

be required to operate bigger, wide-body aircraft than the types that we currently operate. We also would need to procure

flight slots from local airport authorities or carriers. These expanded activities could require us to make significant

expenditures and/or incur substantial indebtedness. In addition, the operation of such larger aircraft over long routes

would involve additional complexities, including securing the services of qualified pilots, flight staff and engineers with

international experience.

Factors that may have an impact on our international growth strategy include:

l delay or inability to obtain permissions and approvals from regulatory authorities;

l delay or inability to procure flight slots on terms that are financially viable;

xvii

l changes to our cost structure;

l factors affecting demand in international travel to and from India, including the general condition of the global

economy;

l operational, financial, marketing and legal challenges (including compliance with foreign laws) that are different

from those that we currently encounter;

l our ability to operate and manage in a cost effective manner, a larger operation;

l greater exposure to exchange rate volatility;

l our ability to secure a sufficient number of additional aircraft on favorable lease or purchase terms; and

l our ability to hire, train and retain sufficient numbers of pilots, flight crew and engineers with international

experience.

Many of these factors are beyond our control. There can be no assurance that we will be able to successfully expand our

international operations, and our failure to do so may have a material adverse effect on our prospects and future results

of operations. See “Business – International Operations” on page 59 of this Prospectus.

Our failure to successfully implement our growth strategy would harm the market value of our Equity Shares.

Our growth strategy involves expanding the number of markets we serve, including international markets, and increasing

the frequency of flights to the markets we currently serve. Achieving these goals is essential for us to benefit from cost

efficiencies resulting from economies of scale and to increase our operating revenues and profits. Increasing the number

of markets we serve and our flight frequencies depend on our ability to identify the appropriate Indian and international

markets upon which to focus and to gain suitable airport access and route approval in these markets. Any condition that

would prevent or delay our access to airports or routes that will be vital to our growth strategy, including the ability to

process more passengers, the imposition of flight capacity restrictions, or our ability to maintain existing slots or obtain

additional slots could constrain the expansion of our operations.

Expansion of our markets and flight frequencies may also strain our existing management resources and operational,

financial and management information systems to the point that they may no longer be adequate to support our operations,

requiring us to make significant expenditures in these areas.

In the light of these factors, we cannot assure you that we will be able to successfully establish new markets or expand

our existing markets, and failure to do so would harm our strategy, business and the value of our Equity Shares.

We rely heavily on automated systems to operate our business, and any failure of these systems could harm our

business.

We depend on automated systems to operate our business, including our computerized airline reservation system, SABRE,

global distribution systems (“GDSs”) such as Abacus, Amadeus, Galileo, Sabre GDS and Worldspan, telecommunications

systems, websites and other automated systems. Our reservation and website systems must be able to accommodate a

high volume of traffic and deliver important flight information. Substantial or repeated reservation, website or

telecommunications systems failures could reduce the attractiveness of our services and could cause our customers to

purchase tickets from another airline. Any disruption in these systems could result in the loss of important data, increase

our expenses and generally harm our business.

Our maintenance costs will increase as our fleet ages.

The average age of our aircraft is currently approximately 4.5 years and our aircraft require less maintenance currently

than they will in the future. We also currently incur lower maintenance expenses because some of the parts on our aircraft

are under multi-year warranties. As our fleet ages and the warranties on our aircraft expire, our maintenance costs will

increase, both on an absolute basis and as a percentage of our operating expenses. For example, in fiscal 2006 and 2007,

D Checks are scheduled for nine and eight Boeing 737 aircraft, respectively, which will result in the unavailability of such

aircraft for a period of approximately 45 days during each such D Check. Although we cannot reasonably predict how

much our maintenance costs will increase in the future, we expect that they will increase.

xviii

We may be unable to maintain our company culture as our business grows. If we are unable to attract and retain

qualified personnel at reasonable costs, our business may be harmed.

We believe that our growth potential and maintenance of our service-oriented company culture are directly linked to our

capacity to attract and maintain the best professionals available in the Indian airline industry. We are dedicated to

providing professional, high-quality service in a positive work environment and being innovative in finding ways to

improve our business. We place high emphasis on the selection and training of employees with the potential to add value

to our business and who we believe fit in with and contribute to our company culture. As we grow, we may be unable

to identify, hire or retain enough people who meet the above criteria, or we may have trouble maintaining this company

culture as we become a larger company. Our company culture is crucial to our business plan, and failure to maintain that

culture could adversely affect our business and results of operations.

Although our labour costs are lower than airlines in developed countries, we expect salaries, wages and benefits to

increase on a gross basis and these costs may increase as a percentage of our overall expenses, which could harm our

business. Our expansion plans will require us to hire, train and retain a significant number of new employees in the future.

From time to time, the airline industry has experienced a shortage of personnel, especially pilots, AMEs and technicians.

We have also experienced a high level of attrition of our in-flight crew. Attrition rates for employees (based on the

average number of personnel at the beginning of such period and at the end of such period) in fiscal 2002, 2003 and 2004

were 8.9%, 13.2% and 14.1%, respectively, and 5.5% in the six months ended September 30, 2004. In-flight crew attrition

rates for such periods were 15.4%, 18.3%, 26.9% and 10.6%, respectively. In addition, attrition rates for airport services

staff in fiscal 2002, 2003 and 2004 and for the six months ended September 30, 2004 were 10.6%, 18.3%, 15.9% and 6.8%,

respectively. We compete with other airlines for labour in highly skilled positions. For certain of our non-unionized staff

such as pilots, cabin attendants and engineers, we have in consultation with such staff agreed to certain annual

compensation levels until 2007. These contemplate annual increases in fiscal years 2006 and 2007. Our competitors may

offer wage and benefit packages that are more attractive than our wage and benefit packages. We may be adversely

affected if highly skilled employees such as pilots, who have been trained by us, leave our employment and join our

competitors. If we are unable to attract and retain qualified and skilled employees at a reasonable cost, our business and

expansion plans may be adversely affected.

Our success depends in large part upon our senior management, directors and key personnel and our ability to attract

and retain them.

We are highly dependent on our senior management, our directors and our other key personnel. Our future performance

will depend upon the continued services of these persons. We do not maintain key man life insurance for any of the

senior members of our management team, our directors or our other key personnel. Competition for senior management in

our industry is intense, and we may not be able to retain our senior management personnel or attract and retain new

senior management personnel in the future. The loss of any of the members of our senior management, our directors or

other key personnel may adversely affect our business and results of operations.

Mr. Naresh Goyal and Tail Winds have significant control over us, including as a result of the terms of our Articles

of Association, and have the ability to direct our business and affairs; their interests may conflict with your interests

as a shareholder.

Our promoters, Tail Winds and Mr. Naresh Goyal, will control approximately 80% of our outstanding Equity Shares upon

completion of the Offer.

Our Articles of Association confer certain rights on Mr. Naresh Goyal, the NG Group and certain companies controlled by

Mr. Naresh Goyal relating to the governance of the Company. Mr. Goyal is the permanent Chairman of the Company and

Chairman of our Board, and is entitled to chair all meetings of shareholders or directors, respectively, for so long as he

is willing to do so irrespective of the shareholding of Mr. Goyal or the NG Group. In Mr. Goyal’s absence at any

shareholders’ or directors’ meeting, one of the directors nominated by the NG Group shall preside. The Chairman shall

have the casting vote at any shareholders’ or directors’ meeting and has the power to direct the convening of any Board

meeting. For so long as the NG Group holds 35% or more of the Equity Shares of the Company:

xix

l The NG Group shall be entitled to appoint one third of the Company’s directors, which directors may be removed

or replaced only by the NG Group;

l The quorum for any meeting of the board of directors shall require the presence of at least one third of its total

strength, which must include at least an equal number of directors who are NG Group nominees, unless the

absent NG Group nominee directors consent in writing to a quorum requirement being satisfied. However, in the

event of a quorum not being available at an adjourned meeting, the directors present shall constitute the quorum

and may transact business at such an adjourned meeting;

l The NG Group shall be entitled to designate one or more of its appointed directors as the Managing Director(s),

Manager or Executive Director(s) of the Company, and the NG Group shall be entitled to specify the terms of

appointment of, or remove, any Managing Director, Manager or Executive Director;

l The quorum for any meeting of shareholders shall require the presence of a representative of the NG Group

(although actions may be taken at an adjourned meeting even if an NG Group representative is not present);

l If Mr. Goyal is unable to continue as the Chairman of the Company, then the Chairman of the Board shall act as

Chairman of the Company; and

l If Mr. Goyal is unable to continue as the Chairman of the Board, then one of the NG Group Directors shall act

as Chairman of the Board.

Accordingly, our promoters and the NG Group have the ability to exercise significant influence over matters requiring

shareholders’ or directors’ approval, even if their ownership interest in our equity capital should be reduced significantly.

This control could delay, defer or prevent a change of control of us, impede a merger, consolidation, take-over or other

business combination involving us, or discourage a potential acquirer from making a tender offer or otherwise attempting

to obtain control of us. For further details, see “Main Provisions of the Articles of Association.”

We have entered into certain transactions with certain promoter group companies, including with respect to our licenses

to use the “Jet Airways” mark and our principal GSA agreement. These transactions may potentially involve conflicts of

interest. See “Risk Factors - We do not currently own the ‘Jet Airways’ mark” and “Related Party Transactions” as set

out on pages xix and 124, respectively, of this Prospectus.

We rely on third parties to provide us with facilities and services that are integral to our business.

We have entered into agreements with third-party contractors to provide certain facilities and services required for our

operations, such as aircraft maintenance. We expect to enter into similar agreements in any new markets we enter. The

loss or expiration of these contracts or any inability to renew them or negotiate contracts with other providers at

comparable rates could harm our business. Our reliance on others to provide essential services for us also gives us less

control over costs, and the efficiency, timeliness and quality of contract services.

We may be subject to unionization, work stoppages, slowdowns or increased labour costs.

Approximately 11% of our aggregate workforce as of September 30, 2004 was unionized, comprising certain categories of

our employees at Mumbai, Delhi and Kolkata. We have entered into memoranda of settlements with the respective unions

at Mumbai, Delhi and Kolkata, which are valid from periods between 2005 and 2008. Industrial action or work stoppages

by our employees could be disruptive to our operations and could harm our business and results of operations.

We also rely on the services of approximately 2,100 travel agents in India who sell our tickets and who receive commission

for the sale of such tickets. Any concerted action by these travel agents against us could adversely affect our results of

operations.

We do not currently own the “Jet Airways” mark.

There is significant goodwill in the “Jet Airways” name and trademark, which is a registered trademark in India. The use

of the “Jet Airways” trademark (together with certain variations thereof) has been licensed to us for use in India on an

exclusive, non-assignable basis by Jet Enterprises Private Limited (a company substantially owned by Mr. Naresh Goyal)

(“Jet Enterprises”) pursuant to a Trade Marks Registered User Agreement dated October 15, 2000, as amended (the

“Registered User Agreement”). Certain other variations of the “Jet Airways” trademark and certain other related trademarks

(for which Jet Enterprises has applied, or proposes to apply for, registration) have also been licensed to us by Jet

Enterprises on an exclusive non-assignable basis for use in India pursuant to a Common Law Trade Marks User Agreement

dated October 15, 2000, as amended (the “Common Law Agreement”). Once a trademark is registered, such trademark

should be licensed to us under a registered user agreement.

Under the Registered User Agreement, we are required to pay Jet Enterprises license fees that vary between 0.10% and

0.20% of our gross revenues (as defined in the Registered User Agreement), while under the Common Law Agreement, we

are required to pay a fixed annual license fee of Rs.0.1 million for each trademark licensed under the Common Law

Agreement. The Registered User Agreement and the Common Law Agreement are valid for a period of fifteen years,

commencing October 2000, and are renewable at the option of Jet Enterprises for a further period of ten years.

Jet Enterprises has taken steps to register the “Jet Airways” mark and related trademarks outside India. The “Jet Airways”

trademark is currently registered in Hong Kong, Singapore, U.A.E., the U.K. and Mauritius and Jet Enterprises is seeking

to register this trademark in certain other jurisdictions outside India.

Certain parties have raised objections to the registration of the “Jet Airways” trademark in the U.K. and in the United

States. For further particulars, see litigation of promoter group companies beginning on page 144 of this Prospectus.

Pursuant to a letter dated December 15, 2004, Jet Enterprises confirmed to us that as long as we are not in default under

any registered user agreements or common law agreements pursuant to which Jet Enterprises had licensed trademarks to

us, Jet Enterprises will license the use of the “Jet Airways” and related trademarks to us for use in the other countries

where Jet Enterprises has registered or applied for registration of the “Jet Airways” trademark and where we seek to

operate in the future. Subsequently, however, pursuant to a letter agreement dated January 31, 2005, Jet Enterprises

agreed to transfer and assign all its right, title and interest in the “Jet Airways” trademark, other variations thereof and

certain other related trademarks to us that are currently owned by Jet Enterprises and are licensed to us. Pursuant to such

letter agreement, we and Jet Enterprises have agreed to endeavor to conclude such transfer and assignment by July 31,

2005, subject to applicable laws and regulations and the execution of mutually satisfactory documentation. We had also

agreed that the consideration for such transfer and assignment shall be determined by independent certified public

accountants of repute to be jointly appointed by us and Jet Enterprises. Subsequently, pursuant to a letter agreement

dated February 12, 2005, we and Jet Enterprises have agreed that the consideration payable to Jet Enterprises for the

transfer and assignment of all trademark and other intellectual properties owned by Jet Enterprises and licensed to us will

not exceed the Rupee equivalent of U.S. $7.5 million. Such consideration amount has been mutually agreed by us and Jet

Enterprises based on a valuation by Chaturvedi & Shah, chartered accountants. We have also agreed that the consideration

amount will be paid by us on the completion of the transfer and assignment of all such trademarks and other intellectual

property, which will be undertaken after consultation with legal counsel and ensuring compliance with applicable laws and

regulations and execution of mutually satisfactory documentation. We will also seek to have the copyright in the artistic

work relating to the “Jet Airways” mark and variations thereto assigned to us by Jet Enterprises on mutually agreed

terms.

We have high levels of indebtedness. If we fail to comply with our financing covenants, some of our financing

agreements may be terminated.

As of September 30, 2004, our long-term indebtedness and subordinated debt obligations was Rs.31,481 million, of which

approximately 32.2% is on a floating rate basis and linked to LIBOR.

Under certain of our financing agreements, we are required to comply with specified covenants. In addition, certain of our

lease agreements require that Tail Winds should continue as the majority shareholder of the Company and Mr. Naresh

Goyal should hold not less than 51% of the shares of Tail Winds, and a failure to comply with either condition will result

in an event of default. The terms of our financing agreements may limit our ability to obtain additional financing for

working capital and other purposes and could result in the diversion of substantial cash flow from our operations to

service our financing obligations, thereby limiting our ability to plan for or react to changes in our business and the

airline industry and to general economic conditions.

xxi

Our general sales agents for India and certain other countries are controlled by our promoter, Mr. Naresh Goyal.

Our general sales agent (“GSA”) for India is Jetair Private Limited (“Jetair”), which is controlled by Mr. Naresh Goyal. We

have a GSA agreement with Jetair for a period of four years commencing April 1, 2004. Such agreement with Jetair

requires Government approval under the Companies Act, and we currently have received approval for such agreement for

a period of three years commencing April 1, 2004. Pursuant to such GSA agreement, we pay Jetair an overriding commission

of 3% on all passenger sales and 2.5% on all cargo sales. This commission is payable in addition to the sales commissions

that is payable to sales and travel agents of 5% on Rupee fares and cargo and 7% on foreign exchange fares. Our

agreement with Jetair provides for charge back of certain expenses, including remuneration of certain employees (sales,

reservation and service staff) who are rendering services which should be rendered by Jetair as our GSA, computer

reservation system (“CRS”) costs (up to a maximum of 25% of such CRS costs) and Societe International de

Telecommunications Aeronautiques (“SITA”) communication charges, in amounts as determined by us. In fiscal 2004 and

the six months ended September 30, 2004, commissions to Jetair constituted 2.5% and 3.1%, respectively, of our Total

Expenses for such periods. We propose to join the Billing Settlement Plan (“BSP”) system in India, an IATA sponsored

standardized ticketing and collection system. If we migrate sales to the BSP system, we expect that our GSA agreement

with Jetair may require modification.

While we are already a part of the BSP systems in certain countries outside India, there can be no assurance when we

will join the BSP system in India or amend the terms of the GSA agreement with Jetair.

In addition, we have GSA agreements with Jet Airways LLC, Dubai, UAE and its two subsidiaries Jet Airways of India

Inc., U.S.A. (for U.S.A. and Canada) and India Jet Airways (Pty) Ltd., South Africa (for South Africa). These companies

are all promoter group companies. In fiscal 2004 and the six months ended September 30, 2004, commissions to these

companies constituted 0.5% and 0.4% respectively, of our Total Expenses for such periods.

Our transactions with these promoter group companies may potentially involve conflicts of interest. There can be no

assurance that in such circumstances, our promoter will not favour the interests of Jetair or other promoter group

companies over our interests.

Any further issuance of Equity Shares by us or sales of our Equity Shares by Tail Winds or any other major shareholder

may adversely affect the trading price of the Equity Shares.

Any future issuance of our Equity Shares by us could dilute your shareholding. Any such future issuance of our Equity

Shares or sales of our Equity Shares by Tail Winds or any other major shareholder may also adversely affect the trading

price of our Equity Shares, and could impact our ability to raise capital through an offering of our securities. In addition,

any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity

Shares. Upon completion of the Offer, 20% of our post-Offer paid-up equity capital on a fully diluted basis held by Tail

Winds will be locked up for a period of three years from the date of allotment of Equity Shares in the Offer. All other

remaining Equity Shares that are outstanding prior to the Offer will be locked up for a period of one year from the date

of allotment of Equity Shares in the Offer.

The trading price of our Equity Shares may be affected by variations in our results of operations.

We expect our quarterly operating results to fluctuate in the future based on a variety of factors, including:

l the timing and success of our growth plans as we lease or purchase additional aircraft, increase flights in existing

markets and enter new markets;

l changes in passenger fares, fuel, aircraft rentals, interest component of hire purchase rentals and maintenance

costs; and

l increases in personnel, marketing and other operating expenses to support our anticipated growth.

In addition, seasonal variations in traffic, weather conditions such as fog and poor visibility, and certain expenditures

affect our operating results from quarter to quarter. The highest levels of traffic and revenue on our routes are generally

realized from October to February. Given our high proportion of fixed costs, this seasonality affects our profitability from

quarter to quarter. Many of our areas of operations in North India experience bad weather conditions in the winter,

causing increased costs associated with delayed and cancelled flights and accommodating passengers who have been

unable to travel.

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Due to the factors described above, our operating results may vary from quarter to quarter. In addition, it is possible that

in any future quarter our operating results could be below the expectations of investors and any published reports or

analyses regarding the Company. In that event, the price of our Equity Shares could decline, perhaps substantially.

The issue of Equity Shares pursuant to our proposed Employee Stock Purchase Scheme or any grant of stock options

under our proposed Employee Stock Option Scheme will result in a charge to our profit and loss account and will

adversely impact our profits.

After the listing of our Equity Shares in this Offer, we intend to adopt either an Employee Stock Purchase Scheme (the

“ESPS”) or an Employee Stock Option Scheme (the “ESOP”) in which eligible employees and directors of the Company

and any other person permitted under applicable law or regulation can participate, subject to such approvals as may be

necessary. The criterion for selection will be determined by our Board and approved by our shareholders. The ESPS or

ESOP will comply with the SEBI (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999 and the

issuance of Equity Shares pursuant thereto will be subject to compliance with all applicable laws and regulations. We

propose to issue a maximum of 0.5% of our post-Offer paid-up equity capital for the ESPS or ESOP schemes.

The issue of Equity Shares pursuant to the ESPS or the issue of options under ESOP is likely to occur in fiscal 2006,

although there can be no assurance as to the timing of adoption of any such scheme, which may occur in fiscal 2006 or

thereafter.

Any issuance of Equity Shares pursuant to the ESPS will result in a charge to our profit and loss account equal to the

product of such number of Equity Shares issued and the difference between the applicable market price of our Equity

Shares and the price at which our employees and directors will purchase the Equity Shares. We have not as yet

determined the issue price at which Equity Shares will be sold, the number of Equity Shares proposed to be issued, the

identity of such eligible persons and the timing of adoption of the ESPS scheme or the date of issue of Equity Shares

thereunder.

The ESOP scheme will also result in a charge to our profit and loss account equal to the product of the number of Equity

Shares proposed to be issued in accordance with the accounting principles used for determining such charge using the

fair value method or applicable market price of our Equity Shares. Such charge will be amortized over the vesting period

of the stock option. We have not as yet determined the number of stock options to be granted, the exercise price or the

number of Equity Shares to be issued, the identity of the eligible persons and the timing of the ESOP scheme.

There are a number of legal proceedings against us, our directors, our promoters and promoter group companies.

We, our directors, our promoters and promoter group companies are parties to certain legal proceedings initiated by or

against us that are incidental to our business and operations. These legal proceedings are pending at different stages of

adjudication before various courts and tribunals. Should any new developments arise, such as a change in Indian law or

rulings against us by appellate courts or tribunals, we may need to make provisions in our financial statements, which

could increase our expenses and our current liabilities. Furthermore, if significant claims are determined against us and we

are required to pay all or a portion of the disputed amounts, this may have a material adverse effect on our business and

profitability.

We have challenged the grant by the Cochin International Airport Limited (“CIAL”) of an exclusive ground handling

services contract to Air India at the Monopolies and Restrictive Trade Practices Commission. As a result of this contract,

we are prevented from arranging our own ground handling services (which we are entitled to provide at all other airports

in India) and instead are required to use the services of Air India. Under such arrangements, we are required to pay Air

India ground handling charges that are significantly greater than the costs we would otherwise have incurred in arranging

our own ground handling services. We are currently making payments of a part of such charges to Air India under

protest. In the event that we are required to pay Air India the entire outstanding amounts, including any interest payable

thereon, our financial condition and results of operations could be adversely affected.

We have filed a writ petition in the High Court, Mumbai (being Writ Petition No.208 of 2001), challenging the order of the

Municipal Corporation of Greater Mumbai levying octroi duty (an entry tax) of approximately Rs. 290 million on certain of

the Company’s fleet of aircraft. If the imposition of the octroi duty is upheld, our results of operations could be adversely

affected.

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In addition, there are certain outstanding civil litigation initiated by and against us. We are also subject to certain

consumer claims, claims by our employees and certain claims against us by the income tax and sales tax authorities in

India. We believe that these claims, even if finally determined against us, will not result in a material adverse effect to our

results of operations.

Mr. Naresh Goyal and certain of our promoter group companies are parties to certain legal proceedings by and against

them that are incidental to their business and operations. They are subject to certain civil and criminal cases filed against

them and certain claims made by the income tax authorities. We believe these claims, even if finally determined against

them, will not result in a material adverse effect to our Company’s business.

For more information regarding legal proceedings by or against us, our directors, our promoters and our promoter group

companies, please see the section entitled “Outstanding Litigation” beginning on page 131 of this Prospectus.

Certain of our promoter group companies are loss making.

Certain of our promoter group companies have incurred losses in the financial years ended March 31, 2002, March 31,

2003 and/or March 31, 2004. For more information, please see the section entitled “Our Promoters and Group Companies”

beginning on page 109 of this Prospectus.

We have entered into certain transactions with related parties.

We have entered into various transactions with related parties, including the several promoter group companies, directors

and employees. These transactions include the following:

l payments made under GSA agreements with Jetair Private Limited, Jet Airways LLC, Jet Airways of India Inc.

and India Jet Airways (Pty) Limited;

l payments for premises leased;

l payment of license fees to Jet Enterprises Private Limited pursuant to trade mark licensing agreements; and

l payments for ground transportation services.

These transactions may potentially involve conflicts of interest. For more detailed information on our related party

transactions, see note 14 to our Interim Audited Financial Statements under Indian GAAP. As of September 30, 2004,

loans and advances to related parties included a sum of Rs.164.8 million advanced to a private company in which our

director is a director/member. The advances were primarily in relation to premises leased by our Company.

As at September 30, 2004, we had contingent liabilities as disclosed in our Statement of Assets and Liabilities under

Indian GAAP, and our results of operations could be adversely affected if any of these contingent liabilities materializes.

Our contingent liabilities, as of September 30, 2004, were Rs.4,039 million. These comprised the following:

(Rs. in millions)

Unprovided income tax demands which are disputed in appeals 37

Unprovided claims against the Company, pending civil and consumer suits 79

Unprovided claims for Octroi duty on aircraft by the Municipal Corporation

of Greater Mumbai not accepted by the Company 290

Disputed claims against the Company towards landing and navigation charges made by the AAI 197

Disputed claims against the Company towards ground handling charges

levied at Cochin International Airport. 235

Letters of credit outstanding 1,629

Bank guarantees outstanding 1,572

Total Rs. 4,039

Note: In addition to the aforesaid contingent liabilities, we will be required to pay arrears of cumulative dividends aggregating Rs.88

million in respect of the cumulative convertible redeemable preference shares issued to International Finance Corporation (“IFC”).

If any of these contingent liabilities materializes, our results of operations could be adversely affected.

xxiv

We have not entered into any definitive agreements to utilize a substantial portion of the net proceeds of the Fresh

Issue.

We intend to use the net proceeds of the Fresh Issue for repayment of debt, capital expenditure and general corporate

purposes. See “Objects of the Offer” on page 33 of this Prospectus. We have not entered into any definitive agreements

to utilize the net proceeds for capital expenditures relating to investments in equipment, engines and spares, including a

flight simulator, or for the purchase of any land in connection with an investment in an integrated training center, or for

general corporate purposes. There can be no assurance that we will be able to conclude definitive agreements for such

capital expenditures on terms anticipated by us. Pending any use of the net proceeds of the Fresh Issue, we intend to

invest the funds in high quality, interest bearing liquid instruments including deposits with banks. These investments will

be authorized by our Board or a duly authorized committee thereof. These proposed expenditures have not been appraised

by any bank or financial institution.

We will require RBI approval for the redemption of CCRPS issued to IFC.

We intend to use a portion of the net proceeds of the Fresh Issue to redeem the CCRPS issued to IFC. However, we will

require RBI approval prior to such redemption. We intend to apply to the RBI for its approval. However there is no

certainty that such approval will be obtained in time or on acceptable terms.

External Risk Factors

Substantial increases in fuel costs or the unavailability of sufficient quantities of fuel would harm our business.

Fuel expenditure constitutes a significant portion of our Total Expenses. In fiscal 2002, fiscal 2003, fiscal 2004 and the six

months ended September 30, 2004, aircraft fuel expenditure constituted 19.9%, 20.4%, 21.9% and 26.1%, respectively, of

our Total Expenses for such periods. Significant increases in fuel costs would harm our financial condition and results of

operations.

Historically, our fuel expenditure has been subject to wide price fluctuations in the price of aviation turbine fuel (“ATF”),

which is based primarily on the international price of crude oil. The price of crude oil is influenced by geopolitical issues,

government regulation and various supply and demand factors, including periods of market surplus and shortage. The

price of ATF in India is also dependent on other factors including the following:

l limited competition in India because ATF is currently available at airports from only three Government-controlled

companies (Indian Oil Corporation Limited (“IOC”), Bharat Petroleum Corporation Limited (“BPCL”) and Hindustan

Petroleum Corporation Limited (“HPCL”);

l periodic variations in the ex-refinery price charged for ATF by IOC, BPCL and HPCL; the price is fixed every

month based on the Arab Persian Gulf Platt ATF prices and the cost of crude oil;

l fluctuations in the exchange rate between the U.S. Dollar and the Rupee, since a substantial percentage of crude

oil is imported;

l excise duty on ATF, which is currently 8% (in addition, applicable education cess is also required to be paid);

l sales tax on ATF is levied at all the stations we currently service in India (except for Diu, Leh and Port Blair),

and is currently between 4% and 30.55%, with a weighted average of approximately 22.1% for the six months

period ended September 30, 2004; and

l inability to enter into price hedging arrangements for fuel supply due to Government regulations, which do not

permit domestic airlines such as us to hedge the price of ATF on the basis that we do not import ATF.

Because of the effect of these events on the price and availability of fuel, the cost and future availability of fuel cannot

be predicted with any degree of certainty. In the event of a fuel supply shortage or higher fuel prices, we may be required

to curtail some of our scheduled services. Also, some of our competitors may have more leverage than us in obtaining

fuel. We cannot assure you that future increases in prices of fuel can be offset, in part or at all, by increases in passenger

fares.

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Lack of airport infrastructure and facilities in India could adversely affect our business.

We, like other airlines, are dependent on the quality of airport infrastructure for our future expansion and the availability

and cost of terminal space, slots and aircraft parking are critical to our operations. Two of the key airport facilities from

which we operate, Mumbai and Delhi, are highly congested and passenger processing is currently at or near maximum

capacity. An increase in the number of airlines operating from Mumbai and Delhi may result in an increase in congestion

and delays at these airport facilities, which could have a material adverse effect on our operations. All parking bays for

aircraft and prime time departure slots in Mumbai and Delhi are already fully utilized. There is limited availability of

parking bays in other major airports we connect. We are expanding our fleet and require additional ground and maintenance

facilities, including gates and hangars, and support equipment. These and other required facilities and equipment may be

unavailable in a timely or economic manner. Our inability to lease, acquire or access airport facilities on reasonable terms

or at preferred times to support our growth could have a material adverse effect on our operations.

In February, 2004, the Government invited expressions of interest in connection with the proposed restructuring and

modernization of the airports at Mumbai and Delhi. Work has commenced on green-field airport projects at Bangalore and

Hyderabad which are being constructed by private parties. These developments may lead to increases in the cost of

using airport infrastructure and facilities and may also result in an increase in related costs such as landing charges. Such

increases may adversely affect our operating results.

There are various restrictions under Indian laws and regulations applicable to foreign investment in a domestic

airline. The Industrial Policy prohibits foreign airlines from having any direct or indirect equity participation in a

domestic airline. In addition, a foreign financial institution or other entity that proposes to hold equity in the

domestic air transport sector must not have foreign airlines as its shareholder. Investors, particularly FIIs, should

carefully review such foreign investment restrictions prior to making any investment in our Equity Shares.

Pursuant to the industrial policy of the Government of India (the “Industrial Policy”) and the Foreign Exchange Management

(Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000, as amended (the “FEMA Regulations”),

any investment in an Indian domestic airline by persons resident outside India requires the prior approval of the Foreign

Investment Promotion Board, the Government of India (“FIPB”). However, the Ministry of Civil Aviation, Government of

India (“MoCA”), pursuant to Notification No. AV-13011/10/96-DT (Vol. II) dated November 10, 2004 (published in the

Gazette of India on November 13, 2004) has permitted foreign direct investment in the “Air Transport Services (Domestic

Airlines)” sector up to 49% through the “automatic route” (i.e. without the prior approval of the FIPB). The November 10,

2004 notification also permits investment by an NRI up to 100% in an Indian domestic airline company under the

“automatic route”. The notification also clarifies that no direct or indirect equity participation by foreign airlines is

permitted in a domestic airline. Amendments to the FEMA Regulations to reflect the policy changes notified in the

November 10, 2004 notification are awaited.

The Reserve Bank of India (the “RBI”), by its A.P. (DIR Series) Circular No. 14 dated September 16, 2003, derecognised

Overseas Corporate Bodies (“OCBs”), such as Tail Winds, as an eligible class of investors under the various investment

routes/schemes under the rules and regulations promulgated under the Foreign Exchange Management Act, 1999, as

amended (“FEMA”). Subsequently, the RBI by its Notification No. FEMA 101/2003-RB dated October 3, 2003, issued the

Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCBs)) Regulations,

2003 (the “OCB Regulations”) to this effect. Further, by its A.P. (DIR Series) Circular No.44 dated December 8, 2003, the

RBI clarified, among other matters, the following:

l An erstwhile OCB may transfer its shares in an Indian company by way of sale (i) to NRIs in terms of the OCB

Regulations (without any prior regulatory approval) and (ii) to residents in terms of the FEMA Regulations (i.e.,

with the prior approval of the RBI).

l In connection with the transfer of its shares in an Indian company to a non-resident entity (other than an NRI),

an erstwhile OCB may seek the prior permission of the FIPB and the RBI.

Subsequently, the RBI by its A.P. (DIR Series) Circular No. 16 dated October 4, 2004 granted general permission for the

transfer of shares of an Indian company by Non-Residents (including erstwhile OCBs, such as Tail Winds), to residents,

subject to the terms and conditions, including pricing guidelines stipulated in such Circular.

xxvi

Chaturvedi and Shah, Chartered Accountants, by their letter dated November 2, 2004 addressed to the FIPB, requested

the FIPB to confirm/clarify certain regulatory issues. The FIPB was requested, on a no names basis, for certain clarifications

on behalf of an Indian company in the domestic airlines sector which was contemplating an initial public offering. The

FIPB was informed that the company was promoted by a Non Resident Indian (“NRI”) who held the shares of such

company through an OCB in which such NRI had a 100% shareholding. The FIPB was further informed that the initial

public offering by the company would be made to persons within the definition of Indian residents (including Foreign

Institutional Investors (“FIIs”) and Qualified Institutional Buyers (“QIBs”) registered with SEBI), and would comprise of

a fresh issue of shares by the company and an offer for sale of shares in the company by the OCB to such Indian

residents.

The FIPB by its letter dated November 5, 2004 bearing No. 9(24)/2004-FIPB clarified that:

l in an initial public offering in Indian capital markets, SEBI registered FIIs and QIBs registered with SEBI are

eligible, and no prior approval of the FIPB is required in this regard; and

l a transfer of the shares by an erstwhile OCB in favor of residents, as long as such erstwhile OCB is not on the

“adverse list” of the RBI, is permissible, and no prior approval of the FIPB is required in this regard.

Accordingly, investors should note that:

l Equity Shares offered in the Fresh Issue will be allotted only to Indian residents, SEBI registered FIIs and QIBs

registered with SEBI, and will not be allotted to multilateral and bilateral developmental financial institutions or

other non-resident persons or entities; and

l Equity Shares offered by Tail Winds in the Offer for Sale will be allotted only to Indian residents and NRIs.

No further approvals of the FIPB or the RBI are required for the Allotment of Equity Shares under this Offer. We will be

required to make certain filings with the RBI after the completion of the Offer.

The Industrial Policy further prohibits foreign airlines from having any direct or indirect equity participation in a domestic

airline. The Industrial Policy does not clearly define the scope of the terms “direct or indirect equity participation”. In

addition, our permission to operate scheduled services granted by the Director General of Civil Aviation (“DGCA”) and

the guidelines issued by the DGCA from time to time, including the Aeronautical Information Circular No.4/2004 dated

March 1, 2004 issued by the DGCA (the “AIC No. 4”) specifies the following restrictions:

l a foreign investing institution or other entity that proposes to hold equity in the domestic air transport sector

must not be a subsidiary of a foreign airline;

l a foreign financial institution or other entity that proposes to hold equity in the domestic air transport sector

must not have foreign airlines as its shareholder;

l the substantial ownership and effective control of companies operating scheduled services must be vested in

Indian nationals; and

l a foreign investing institution or other entity that proposes to hold equity in the domestic air transport sector

may have representation on the board of directors of a domestic airline company, but such representation shall

not exceed one-third of the total strength of such board.

No person shall make a Bid in pursuance of this Offer unless such person is eligible to acquire Equity Shares of the

Company in accordance with AIC No. 4, read with the MoCA Notification No. AV.13011/10/96 DT (Vol II) dated November

10, 2004, and other applicable laws, rules, regulations, guidelines and approvals.

The foreign investment restrictions described above may prevent us from raising funds by the issue of shares or

convertible securities to persons resident outside India, reduce our operational flexibility or prevent us from entering into

a transaction, such as a takeover, that is in the best interest of our shareholders.

Investors that bid in the Offer will be required to confirm and will be deemed to have represented to the Company, the

Selling Shareholder, the Underwriters and their respective directors, officers, agents, affiliates and representatives that

they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the

xxvii

Company and will not offer, sell, pledge or transfer the Equity Shares of the Company to any person who is not eligible

under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company. The Company,

the Selling Shareholder, the Underwriters and their respective directors, officers, agents, affiliates and representatives

accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares

of the Company.

The airline industry in India is subject to extensive regulation. Changes in government regulation imposing additional

restrictions on our operations could increase our operating costs and result in service delays and disruptions.

The MoCA is the approving authority for the lease or acquisition of additional aircraft by private airlines. We are also

required to operate on certain routes to economically less developed parts of India as specified by the DGCA under its

Route Dispersal Guidelines. The DGCA regulates the Route Dispersal Guidelines, and any changes in these guidelines

may affect our ability to generate revenues and profits. The DGCA is also the authority that issues and regulates the

operating permit of airlines, certifies and registers aircraft, permits increases in route frequencies and administers all

related aviation regulations.

In addition, the guidelines issued by the DGCA (including AIC No. 4) stipulate the following restrictions and conditions

that affect our business and operations:

l we must be registered and have our principal place of business within India;

l the Chairman of our Board and at least two thirds of our Directors must be citizens of India;

l we must not enter into any shareholders agreement or similar arrangements with a foreign airline or an entity

acting on behalf of a foreign airline, which allows such foreign airline to have effective control in our management.

l we are not permitted to enter into an agreement with a foreign airline which may give such foreign airline the

right to interfere in the management of our business;

l we are not permitted to enter into financial or commercial tie-ups with a foreign airline;

l no foreign airline is permitted to have management or ownership interest in us;

l we are not permitted to enter into any financial arrangements with a foreign airline for the purpose of lease-

finance, hire-purchase or other loan arrangements;

l we are not permitted to enter into management contracts with foreign airlines; and

l we require specific approvals from the DGCA for certain arrangements, such as employing foreign pilots and

engineers.

Any adverse change in these regulations or the imposition of additional restrictions and conditions that affect our

business and operations could impact our ability to grow.

The Airports Authority of India (“AAI”) determines landing charges, route navigation facility charges, terminal navigation

landing charges, allocation of parking bays and allocation of slot timings at 41 of the 42 airports to which we fly in India.

For Cochin, a privately owned airport, the CIAL determines landing charges. Our performance can be affected by any

adverse increase in such charges, unavailability of parking bays and departure slots required by us.

The Government of India is currently considering permitting private domestic air carriers to fly to additional international

destinations. Any delay or inability to obtain permissions and approvals from relevant regulatory authorities could have

a material adverse effect on our international expansion strategy and results of operations.

The Indian aviation regulatory framework is undergoing changes. Indian regulatory authorities may re-evaluate foreign

investment restrictions and other regulations currently applicable to the Indian airline industry. We cannot yet assess

how the evolving regulatory framework will affect our business and results of operations. No assurance can be given that

these or other changes in the Indian airline industry regulations will not have a material adverse effect on our business

and results of operations.

xxviii

Exchange rate instability may adversely affect our financial condition and results of operations.

Our revenues are denominated substantially in Rupees and a significant part of our operating expenses, such as fuel,

aircraft and engine maintenance services, interest and principal obligations under the terms of our foreign debt and

aircraft lease payments are denominated in, or linked to, U.S. Dollars. We face exchange rate risks to the extent that our

expenses and debt repayments are denominated in currencies other than Indian rupees. In fiscal 2004, approximately 15%

of our Total Revenues were derived from tickets sold in foreign currencies and 25% of our Total Expenses, such as

aircraft and engine maintenance services, aircraft lease payments, computer reservation systems costs and aircraft insurance,

were in currencies other than Indian Rupees, predominantly U.S. Dollars. In addition, as of September 30, 2004, our long-

term indebtedness and subordinated debt obligations aggregated Rs.31,481 million, of which approximately 32.2% was

foreign currency denominated.

Since we derive certain revenues in U.S. Dollars, we have a natural hedge to mitigate a part of our exchange rate risk.

While in the past we have entered into derivative contracts with various counterparties to protect ourselves against a

depreciation of the Rupee in relation to the U.S. Dollar, there can be no assurance that we will be able to continue to do

so. As of September 30, 2004, there were no foreign currency forward contracts outstanding.

Any exchange rate fluctuations that we are unable to effectively hedge against, may lead to a decrease in our profit

margins, or to operating losses caused by increases in U.S. Dollar denominated costs, increases in interest expense or

exchange losses on unhedged fixed obligations and indebtedness denominated in foreign currency.

The airline industry is characterized by low profit margins and high fixed cost obligations, and we may be unable to

compete effectively with other airlines with greater financial resources or lower operating costs.

The airline industry is characterized generally by low profit margins and high fixed cost obligations, primarily for hire

purchase charges, engineering and maintenance charges, aircraft fuel, debt service and rent. The expenses of an aircraft

flight do not vary significantly with the number of passengers and tonnage of cargo carried and, as a result, a relatively

small change in the number of passengers or in pricing could have a disproportionate effect on an airline’s operating and

financial results. Accordingly, a minor shortfall in expected revenue levels could harm our business.

In addition, the airline industry is highly competitive and is particularly susceptible to price discounting because airlines

incur only nominal costs to provide service to passengers occupying otherwise unsold seats. We currently compete with

other airlines on all of our routes. We may be unable to compete effectively with other airlines that introduce service or

discounted fares in the markets that we serve.

Our reputation and financial results could be harmed in the event of an accident or incident involving our aircraft.

An accident or incident involving one of our aircraft could involve repair or replacement of a damaged aircraft and its

consequential temporary or permanent loss from service, and significant potential claims of injured passengers and

others. Although we believe we currently maintain liability insurance in amounts and of the type generally consistent

with industry practice, the amount of such coverage may not be adequate and we may be forced to bear substantial

losses resulting from an accident or incident. Substantial claims resulting from an accident in excess of our related

insurance coverage would harm our business and operating results. Moreover, any aircraft accident or incident, even if

fully insured, could cause a public perception that we are less safe or reliable than other airlines, which would harm our

business.

Airlines are often affected by factors beyond their control, including traffic congestion at airports, weather conditions,

bird hits, increased security measures, natural disasters and epidemics, any of which could harm our operating results

and financial condition.

We, like other airlines, are subject to delays caused by factors beyond our control, including air traffic congestion at

airports, adverse weather conditions, natural disasters, bird hits and increased security measures. Delays frustrate

passengers, reduce aircraft utilization and increase costs, all of which in turn affect profitability. During periods of fog,

rain, storms or other adverse weather conditions, flights may be cancelled or significantly delayed. Cancellations or

delays due to weather conditions, traffic control problems, bird hits and breaches in security could harm our financial

xxix

condition and results of operations. In addition, any epidemics or infectious outbreaks or other health related concerns

that impact customers’ willingness to travel could adversely affect our business and results of operations.

The airline industry tends to experience adverse financial results during general economic downturns.

Since a substantial portion of airline travel, for both business and leisure, is discretionary, the airline industry tends to

experience adverse financial results during general economic downturns. Soft economic conditions would continue to put

pressure on the profitability of the industry and us. Any general reduction in airline passenger traffic will harm our

business and results of operations.

Insurance cover is unavailable for certain risks or may be inadequate.

The availability of insurance is fundamental to airline operations. However, insurance cover is generally not available for

certain risks such as mechanical breakdowns. We believe our insurance coverage is consistent with industry practice. To

the extent that any uninsured risks materialize, our operating results and financial performance could be detrimentally

affected.

Insurance costs for airlines increased substantially as a result of the September 11, 2001 terrorist attacks in the

United States, and further increases would harm our business.

Following the September 11, 2001 terrorist attacks, aviation insurers dramatically increased airline insurance premiums and

significantly reduced the maximum amount of insurance coverage liability available to airlines.

Aviation insurers could further increase their premiums in the event of additional terrorist attacks, hijackings, airline

crashes or other events adversely affecting the airline industry. Significant increases in insurance premia would harm our

financial condition and results of operations.

Our performance is linked to the stability of policies and the political situation in India.

The role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has

remained significant over the years. Since 1991, the Government of India has pursued policies of economic liberalization,

including significantly relaxing restrictions on the private sector. Since 1996, the Government of India has changed six

times. There can be no assurance that these liberalization policies will continue in the future. The rate of economic

liberalization could change, and specific laws and policies affecting airlines, foreign investment, currency exchange rates

and other matters affecting investments in Indian companies could change as well. A significant change in India’s

economic liberalization and deregulation policies could disrupt business and economic conditions in India, thus affecting

our business.

The current Indian central government is a coalition of several parties. The withdrawal of one or more of these parties

could result in political instability. Any political instability could delay the reform of the Indian economy and could have

a material adverse effect on the market for our services.

Terrorist attacks or war or conflicts involving India or other countries could adversely affect business sentiment and

the financial markets and adversely affect our business.

Incidents such as the September 11, 2001, terrorist attacks on New York and Washington D.C., and other recent incidents

such as those in Bali, Indonesia, and Madrid, Spain, may adversely affect global equity markets and economic growth as

well as the Indian economy and stock markets. Such acts negatively impact business and economic sentiment, which

could adversely affect our business and profitability.

Also, India has from time to time experienced, and continues to experience, social and civil unrest and hostilities with

neighbouring countries. Armed conflicts, particularly between India and Pakistan, could disrupt communications and

adversely affect the Indian economy. Such events could also create a perception that investments in Indian companies

involve a high degree of risk. This, in turn, could have a material adverse effect on the market for securities of Indian

companies, including our Equity Shares. The consequences of any armed conflicts are unpredictable, and we may not be

able to foresee events that could have an adverse effect on our business.

xxx

After this Offer, the price of our Equity Shares may be volatile, or an active trading market for our Equity Shares may

not develop.

Prior to this Offer, there has been no public market for our Equity Shares. The trading price of our Equity Shares may

fluctuate after this Offer due to a variety of factors, including our results of operations and the performance of our

business, competitive conditions, general economic, political and social factors, volatility in the Indian and global securities

markets, trends in business and leisure travel, the performance of the Indian and global economy and significant

developments in India’s fiscal regime. There can be no assurance that an active trading market for our Equity Shares will

develop or be sustained after this Offer, or that the price at which our Equity Shares are initially offered will correspond

to the prices at which they will trade in the market subsequent to this Offer.

Note to Risk Factors

l Public offer of 17,266,801 Equity Shares for cash at a price of Rs.1100 per Equity Share, aggregating Rs.18,993 million,

comprising a Fresh Issue of 14,245,111 Equity Shares by the Company and an Offer for Sale of 3,021,690 Equity

Shares by the Selling Shareholder. The Offer comprises a Net Offer to the public of 16,066,801 Equity Shares and an

Employee Reservation Portion of 1,200,000 Equity Shares. The face value of the Equity Shares is Rs.10 and the Offer

Price is 110 times of the face value. The Offer will constitute 20% of the fully diluted post Offer paid-up equity capital

of the Company.

l The book value per Equity Share was Rs.17.81 and Rs.26.46 as of March 31, 2004 and as of September 30, 2004,

respectively, as per our restated financial statements under Indian GAAP.

l The net worth of the Company was Rs.2,164 million and Rs.2,848 million as of March 31, 2004 and as of September

30, 2004, respectively, as per our restated financial statements under Indian GAAP.

l The average cost of acquisition of our Equity Shares by our promoters is Rs.8.70 per Equity Share.

l Investors may note that in case of over-subscription in the Offer, allotment to Non Institutional Bidders, and Retail

Individual Bidders shall be on a proportionate basis. For more information, see “Method of Proportionate Basis of

Allotment” on page 183 of this Prospectus.

l For any clarification or information relating to the Offer, investors are free to contact the BRLMs, who will be obliged

to provide such clarification or information to the investors.

l Investors may contact the BRLMs and the Syndicate Members for any complaints pertaining to the Offer.

l Investors are advised to see “Basis for Offer Price” on page 179 of this Prospectus.

l For information on changes in the name of the Company, see “History and Certain Corporate Matters” on page 61 of

this Prospectus.

SUMMARY

You should read the following summary together with the Risk Factors and the more detailed information about us and

our financial statements included in this Prospectus.

Overview

We are a leading airline in India, providing regular scheduled services on routes between all of India’s major cities. We

are the largest domestic airline in India in terms of revenue passengers carried in fiscal 2004 and the six months ended

September 30, 2004. We believe that our focus on providing high-quality, reliable service has enabled us to become the

preferred airline for travellers in India.

We have flown over 48 million revenue passengers (defined as fare paying passengers flown on all flight segments) since

commencing operations on May 5, 1993 until November 30, 2004. We flew approximately 5.82 million revenue passengers

in fiscal 2002, 6.41 million revenue passengers in fiscal 2003, 6.91 million revenue passengers in fiscal 2004 and 3.78 million

revenue passengers in the six months ended September 30, 2004. Our share of the domestic market based on revenue

passengers was 11.2% in fiscal 1995, 45.3% in fiscal 2002, 45.9% in fiscal 2003, 45.3% in fiscal 2004 and 42.3% in the six

months ended September 30, 2004. Source: DGCA

Our aircraft fleet currently comprises 42 aircraft, of which 34 are Boeing 737 aircraft and eight are ATR 72 aircraft. We

currently provide regular scheduled services to 42 destinations in India and two destinations outside India and currently

operate 1,924 flights weekly.

We intend to maintain a disciplined growth strategy by increasing frequency on our existing routes and entering attractive

new markets. Our aircraft fleet has grown from four aircraft in 1993 to 42 aircraft today. Operating a fleet consisting of

limited types of aircraft lowers our operating costs as maintenance issues are simplified, spare parts inventory requirements

are reduced, scheduling is more efficient and training costs are lower, ground time is reduced and reliability is enhanced.

The current average age of our aircraft is approximately 4.5 years. We believe our average fleet age compares favourably

with airlines of our size in India and overseas.

We commenced operation of regular scheduled services to destinations in neighbouring countries, such as Colombo, Sri

Lanka, and Kathmandu, Nepal, in March 2004 and May 2004, respectively. Following the decision of the Union Cabinet to

change the aviation policy on December 29, 2004 and permit Indian scheduled carriers with a minimum of five years of

continuous operations and with a minimum of 20 aircraft in its fleet, to operate scheduled services to other international

destinations, the MoCA has, on January 11, 2005, designated us as an Indian carrier permitted to operate international

services to and from Singapore, Malaysia, Thailand, Hong Kong, the United Kingdom and the United States of America.

Following such designation by MoCA, on January 21, 2005, the DGCA issued AIC No. 2/2005 entitled “Guidelines for

Operation of Indian Scheduled Carriers on International Routes” and invited scheduled Indian carriers to apply for the

allocation of traffic rights on international routes. We have been allocated seven weekly frequencies between India and

Heathrow, London. We have also been recently permitted to operate in the India-Malaysia and India-Singapore routes

with effect from the IATA Summer Schedule 2005. We have been permitted to operate seven Boeing 737-800 flights per

week or 980 seats per week to Malaysia. We have also been permitted to operate seven Boeing 737-800 flights per week

on the Mumbai-Singapore sector or 980 seats per week. We have also been permitted to operate three services per week

on the India (Mumbai) – Belgium (Brussels) – USA (New York) sector with effect from IATA Summer Schedule 2005. With

respect to increased entitlements for some of the aforementioned routes and entitlements for other international routes,

the Government is expected to shortly notify its decisions on the allocation of entitlements among the four scheduled

carriers (that is, Air India, Indian Airlines, Air Sahara and us). We will thereafter be able to finalize our plans relating to

the actual deployment of our aircraft, the number of frequencies that we will operate on various routes as well as

conclude associated arrangements.

Our Operating Revenues have increased from Rs.25,263 million in fiscal 2002 to Rs.28,757 million in fiscal 2003 and

Rs.34,474 million in fiscal 2004. In the six months ended September 30, 2004, our operating revenues were Rs.19,264

million, an increase of 17.9% from our operating revenues of Rs.16,345 million in the six months ended September 30, 2003.

Market growth, increase in our fleet size, our pricing strategy and our entry into new markets have been primarily

accountable for increases in our revenues.

Tail Winds Limited, an Isle of Man company, holds over 99.99% of our Equity Shares. Tail Winds Limited is wholly-owned

by Mr. Naresh Goyal. Mr. Naresh Goyal, our Chairman, has more than three decades of management and operational

experience in the travel and airline industry and brings the benefit of this expertise to our business strategy.

Competitive Strengths

We believe the following are our principal competitive strengths, which differentiate us from other airlines:

Focus on business travel: We offer several services directed towards the convenience of the business traveller, including

telephone check-in facilities, through and “in-city” check-in facilities, priority baggage service, high frequency services on

major routes, same-day return flights on major routes at convenient timings, point to point connections, providing flight

information on cellular phones of customers, our customer loyalty program, e-ticketing, business class section on almost

all flights and airport lounges for business class passengers at most airports. These facilities and our focus on providing

high-quality reliable service have contributed to us becoming the preferred airline for business travellers in India.

Young fleet comprising limited types of aircraft: Our young fleet has enabled us to enjoy a high degree of performance

reliability and to develop a reputation for being an airline that delivers a safe, on-time, modern and comfortable travel

experience. Our aircraft types provide us with state-of-the-art technology and simplified maintenance procedures that

allows us to make adjustments to effectively manage our response to market developments. 34 of our fleet of 42 aircraft

are Boeing 737 variants and the remaining eight are ATR 72-500 aircraft. We were the first airline to introduce the Boeing

737 NG aircraft in India. Operating a fleet of limited types of aircraft leads to increased cost savings in terms of maintenance

and spare parts, scheduling is more efficient and employee efficiency and productivity are increased.

Utilizing our aircraft efficiently: In fiscal 2004 and the six months ended September 30, 2004, our aircraft operated an

average of 9.46 and 9.84 hours per day, respectively. By achieving high utilization, we are able to optimize crew movement,

spread our fixed costs over a greater number of flights and available seat kilometers. We achieve high aircraft utilization

because:

l newer aircraft can be scheduled to fly more hours per day as they are more reliable and require less maintenance than

older aircraft; and

l our staff are able to achieve quick, efficient, airport turnarounds which enable us to increase the number of daily

flights per aircraft.

Strong brand and customer loyalty: We believe that we have established a strong brand that helps to distinguish us

from our competitors by identifying us as a safe and reliable airline that is highly focused on customer service and that

provides an enjoyable flying experience. We believe that our focus on every aspect of customer service, such as our

choice of aircraft, aircraft interiors, our care of passengers in-flight and on the ground, our attention to detail, the

convenient connections which we offer and our high reliability, has enhanced brand awareness and our reputation for

quality. We believe that our strong brand has enabled us to establish alliances with other leading brands for our unique

frequent flyer programs, including with international airlines, domestic and international hotels, a car rental company and

for a co-branded credit card.

Some of the key areas of our customer focus are:

l our fleet of modern generation aircraft with custom designed aircraft interiors;

l our friendly and efficient in-flight service, with meals or heavy snacks being served on nearly all flights;

l high on-time performance;

l tele check-in facilities for business class travellers and Jet Privilege members;

l city check-in facilities in Mumbai, Delhi, Kolkata, Chennai and Bangalore;

l same day return check-in facilities;

l our Jet Privilege frequent flyer program; and

l e-ticketing in accordance with IATA standards and on-line reservations.

We also offer through check-in facilities to passengers of 11 leading international airlines to and from our connecting

destinations. We also believe that our five-tier “Jet Privilege” loyalty program is an innovative program among those

offered by other domestic airlines in India.

We believe we are meeting and exceeding our customer service expectations. We have received numerous awards that

recognize the quality of our service, including the Business World award for the most respected company in the travel

and hospitality sector in 2003 and 2004, the Best Domestic Airline of Asia by the Asian readers of Travel Trade Gazette

for the years 2003 and 2004 and the Financial Express Business Traveller Award (Domestic Airline Category) for Business

Class, Economy Class and Best Service (Airport and In flight) in 2003 and 2004.

Motivated workforce and proven management team: We benefit from a highly motivated workforce that brings high

enthusiasm to air travel and a commitment to superior standards of friendly and reliable quality service that we believe

distinguishes us in our markets. We believe that the positive feedback we have received from our customers is directly a

result of the priority our employees place on delivering top quality customer service. We invest a significant amount of

time and resources into carefully developing the best training practices and selecting individuals to join our team who

share our focus on quality and improvement. We conduct ongoing training programs that incorporate industry best

practices and encourage strong and open communication channels among members of our team so that we can continue

to improve the services we provide. We are led by a management team with significant airline industry experience.

Access to facilities at major airports in India: The major hub of our operations is Mumbai where 19 of our fleet of 42

aircraft are parked (of which 18 have been allotted overnight parking bays and one aircraft is parked for a few hours at

night), followed by 12 in Delhi, six at Chennai, three in Kolkata and two at Bangalore. Our access to overnight parking

bays and landing slots at these five hubs helps us to originate flights from these cities. It also enhances our aircraft

utilization and efficiency of our maintenance activities.

Extensive sales and distribution network: We have access to the sales and distribution network of Jetair, which is a

leading GSA in India with offices in approximately 69 locations. Jetair represents, in addition to us, 15 international

airlines in India. In addition, we are represented by general sales agents in 74 countries outside India that sell and/or

distribute our tickets to international in-bound passengers. Our airline reservation system is hosted on SABRE. We offer

24-hour reservations services at Mumbai, Delhi, Kolkata and Chennai. We also have agreements with major GDSs, including

Abacus, Amadeus, Galileo, Sabre GDS and Worldspan. We have entered into interline agreements with major international

airlines and marketing cooperation agreements with three international airlines. We have joined billing settlement plan

programs in North America, U.K., France, Germany, Switzerland and other key countries. We introduced e-ticketing and

direct internet booking in July 2004. We intend to encourage the use of direct internet bookings by our customers

because we believe it is an efficient distribution channel.

Business Strategy

The key elements of our business strategy include:

Differentiate our product and service: We believe a key to our long-term success is that we offer customers a better

alternative in airline travel. We offer our passengers a unique flying experience by providing new aircraft, pre-assigned

seating, reliable performance, meals on nearly all flights, city check-in facilities in Mumbai, Delhi, Kolkata, Chennai and

Bangalore, tele check-in facilities for business class travellers and Jet Privilege members, same day return check-in

facilities and a well developed frequent flyer program. We place high emphasis on customer service and quality. We

intend to continue to communicate openly with our customers regarding their needs and areas which require continued

improvement. Based on customer feedback, we believe that passengers prefer our customer service to that of our

competitors and that this preference is an important factor in their decision to fly with us over other airlines.

Continue to maintain a young fleet comprising a minimal number of different aircraft types: We intend to continue

our strategy of maintaining a young fleet and a minimal number of different aircraft types to preserve the simplicity of our

operations and control our operating costs.

Maximize revenues through efficient use of technology, focused marketing and optimization of resources: We intend

to continue to maximize our revenues through efficient use of technology, focused marketing and optimization of resources.

For this purpose, we use a state-of-the-art yield management system developed by SABRE. We also intend to continue

to focus on improving productivity and unit costs through reduction of recurring maintenance costs and more efficient

utilization of our crew.

Further strengthen the brand name under which we operate: We intend to continue to enhance the “Jet Airways”

brand recognition in the marketplace through brand building efforts, communication and promotional initiatives such as

participation in industry events, public relations and investor relations efforts. We believe that these initiatives, as well as

the listing of our Equity Shares, will enhance the visibility of our brand name and strengthen our recognition as a leader

in the Indian aviation industry.

Focus on domestic aviation sector: We intend to further penetrate our key markets in India by increasing the number of

flights per day on our key routes and commencing flights to new destinations in India. We believe that this is important

to passengers who choose airlines based on depth of schedule. We intend to continue our focus on providing high-

quality services and facilities to our customers to consolidate our position as a preferred airline for business travellers in

India.

Operate flights to select international destinations, subject to obtaining necessary Governmental approvals and other

conditions. The Government has recently designated us as an Indian carrier permitted to operate international services to

and from Singapore, Malaysia, Thailand, Hong Kong, the United Kingdom and the United States of America. We have

been allocated seven weekly frequencies between India and Heathrow, London. We have also been recently permitted to

operate seven Boeing 737-800 flights per week or 980 seats per week in the India-Malaysia and India-Singapore routes as

well as operate three services per week on the India (Mumbai)-Belgium (Brussels) – USA (New York) sector with effect

from IATA Summer Schedule 2005. We expect to hear shortly on the allocation of increased entitlements for some of the

aforementioned routes and for certain other international routes that we plan to fly.

With our reputation for high-quality performance and service and customer awareness of our brand in India and overseas,

we believe that we are well placed to take advantage of these new opportunities, which are attractive due to prevailing

market conditions, the traffic and revenue growth potential and the present levels of operations and quality and standards

of service to international destinations.

We believe that our existing worldwide GSA representations, agreements with GDSs and our global marketing initiatives

will provide strong support to such international operations. Our market assessment indicates that there is a significant

demand from international passengers who use our airline for travel on domestic routes, particularly from persons of

Indian origin, NRIs and business travellers who visit the country and travel within India. There is also potential demand

from resident Indians who travel overseas and who are familiar with our airline.

Our strategy in respect of operations on international routes will continue to be determined by:

l our ability to leverage our brand, our network, service standards and our relationships with other international

airlines;

l our estimates of demand and traffic flows as established through market studies;

l the estimated financial results on each route;

l maintaining our operating efficiencies and our existing cost structure; and

l optimizing our existing human resources.

Reduce existing high interest debt: We have significant financing obligations, relating to debt incurred in connection

with financing the purchase of our aircraft and engines as well as operating leases for our aircrafts and engines. We

believe that reducing significant financing obligations will improve our ability to meet our strategic goals. We intend to

reduce our existing high interest debt, including through utilization of the proceeds of the Fresh Issue.

Continue to focus on personnel training and on motivating our workforce: We intend to continue to focus on personnel

training to improve employee productivity and to ensure that our employees understand our core strategies. We believe

in open communication, which creates a dynamic working environment and in setting out clear well defined policies and

goals. We intend to continue providing competitive wages and incentives to motivate our workforce.

THE OFFER

Equity Shares offered by:

Fresh Issue by the Company 14,245,111 Equity Shares

Offer for Sale by the Selling Shareholder 3,021,690 Equity Shares

Total 17,266,801 Equity Shares

Of which:

Employee Reservation Portion 1,200,000 Equity Shares

Therefore:

Net Offer to the Public 16,066,801 Equity Shares

QIB Portion At least 9,640,081 Equity Shares

(Allocation on a discretionary basis)

Non Institutional Portion Up to 2,410,020 Equity Shares

(Allocation on a proportionate basis)

Retail Portion Up to 4,016,700 Equity Shares

(Allocation on a proportionate basis)

Equity Shares outstanding prior to the Offer 72,088,900 Equity Shares

Equity Shares outstanding after the Offer 86,334,011 Equity Shares

Objects of the Offer Please see the section entitled “Objects of the Offer”

on page 33 of this Prospectus.

SUMMARY FINANCIAL INFORMATION

SEBI Guidelines require us to include summary financial statements information as restated to reflect the retrospective

effect of the accounting policies adopted by the Company as of September 30, 2004 (“Summary Restated Statements”).

The following summary financial information, other than for the six months ended September 30, 2003, has been

extracted from the Summary Restated Statements prepared in accordance with Indian GAAP, the Companies Act and

SEBI Guidelines, included in the section entitled “Financial Information”. The Summary Restated Statements have been

examined as described in the joint Auditors Report of Deloitte Haskins & Sells and Chaturvedi & Shah dated December

20, 2004, in the section entitled “Financial Information”. The Auditors’ Report refers to the auditors’ reliance on the

financial statements audited by C.C. Chokshi & Company for the years ended March 31, 2000, March 31, 2001, March

31, 2002, March 31, 2003 and March 31, 2004.

This Prospectus also includes audited financial statements for the six months ended September 30, 2004, prepared in

accordance with Indian GAAP and which have not been restated in accordance with SEBI Guidelines (the “Interim

Audited Financial Statements”). The Interim Audited Financial Statements have been audited by Deloitte Haskins &

Sells and Chaturvedi & Shah as described in their audit report dated December 20, 2004 included in the section

entitled “Financial Information”. The summary financial statements given below for the six months ended September

30, 2003 have not been restated in accordance with SEBI Guidelines, and have been extracted from the audit report

for such period prepared by Deloitte Haskins & Sells and Chaturvedi & Shah, which audit report is not included in

this Prospectus.

You should read this summary information in conjunction with our Summary Restated Statements and Interim Audited

Financial Statements including the significant accounting policies and notes thereto and the reports thereon and also

the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included

in this Prospectus. Financial statements prepared in accordance with Indian GAAP differ in certain significant respects

from financial statements prepared under IFRS or U.S. GAAP. See the section entitled “Summary of Significant Differences

between Indian GAAP, IAS/IFRS and U.S. GAAP” on page 271 of this Prospectus for more information.

Summary of Statement of Profits and Losses

Six months Six months

ended ended

September September

Year ended March 31, 30, 30,

2000 2001 2002 2003 2004 2003 2004

(Rs. thousands)

Income

Operating revenues 19,817,591 25,000,523 25,262,865 28,756,808 34,474,211 16,344,486 19,264,181

Non-operating revenues 226,076 275,606 1,234,156 664,184 1,183,183 457,026 402,545

Total Revenues 20,043,667 25,276,129 26,497,021 29,420,992 35,657,394 16,801,512 19,666,726

Expenditure

Employees Remuneration

and Benefits 1,659,879 2,215,435 2,299,294 2,634,482 2,822,436 1,399,394 1,738,827

Aircraft Fuel 3,961,878 5,640,711 5,289,985 6,504,024 7,417,838 3,554,376 4,713,116

Selling & Distribution Expenses 2,923,772 3,653,776 3,727,195 4,150,324 4,263,982 1,983,440 2,527,210

Other Operating Expenses

(including maintenance &

airport charges etc) 6,016,374 7,344,013 7,152,294 8,514,217 9,062,341 4,700,001 4,575,707

Aircraft rentals 2,400,732 2,476,122 2,965,100 2,780,264 2,266,428 1,205,254 1,006,666

Depreciation 2,086,104 2,600,276 3,488,334 4,732,715 5,151,543 2,545,562 2,290,861

Interest 868,432 1,208,982 1,708,712 2,561,344 2,891,401 1,568,238 1,232,231

Total Expenses 19,917,171 25,139,316 26,630,914 31,877,370 33,875,969 16,956,265 18,084,618

EBITDAR

(1) (4)

5,255,688 6,146,587 6,794,097 6,953,761 10,907,614 4,707,275 5,709,321

EBITDA

(2) (4)

2,854,956 3,670,465 3,828,997 4,173,497 8,641,186 3,502,021 4,702,655

EBIT

(3) (4)

768,852 1,070,189 340,663 (559,218) 3,489,643 956,459 2,411,794

Profit (Loss) before taxation 126,496 136,813 (133,893) (2,456,378) 1,781,425 (154,753) 1,582,108

Profit (Loss) after taxation

as per audited accounts 101,750 124,813 (134,313) (2,444,501) 1,631,095 (155,023) 1,293,597

(1) EBITDAR is defined as profit before interest, taxation, depreciation, amortization and aircraft rentals (fixed), excluding

Non-operating Revenues and excluding any adjustments to profit as required under SEBI Guidelines.

(2) EBITDA is defined as profit before interest, taxation, depreciation and amortization, excluding Non-operating Revenues

and excluding any adjustments to profit as required under SEBI Guidelines.

(3) EBIT is defined as profit before interest and taxation, excluding Non-operating Revenues and excluding any adjustments

to profit as required under SEBI Guidelines.

(4) The Company believes that EBITDAR, EBITDA and EBIT provide useful information but should not be considered

as an indication of, or as an alternative to, profit attributable to shareholders or as an alternative to cash flow as a

measure of liquidity. Other companies may calculate EBITDAR, EBITDA and EBIT in a different manner than the

Company.

Summary of Statement of Profits and Losses, as Restated

Six months

ended

Year ended March 31, September

2000 2001 2002 2003 2004 30, 2004

(Rs. thousands)

Profit (Loss) after taxation as per 101,750 124,813 (134,313) (2,444,501) 1,631,095 1,293,597

audited accounts (A)

Add (Less):

Total of adjustments after tax impact 90,048 193,480 (176,735) 1,249,038 (139,230) (609,682)

Net Profit (Loss), as restated 191,798 318,293 (311,048) (1,195,463) 1,491,865 683,915

Summary of Statement of Assets and Liabilities, as Restated

As of

September

As of March 31, 30,

2000 2001 2002 2003 2004 2004

(Rs. thousands)

Net fixed assets (including 15,345,883 17,116,102 33,650,288 32,442,917 27,431,100 25,881,118

capital work in progress)

Investments - - - 597,000 2,334,164 5,008,292

Current assets, loans and advances 7,094,010 8,334,750 10,738,007 12,071,587 11,321,551 11,929,708

Of which:

Cash and bank balances 2,466,836 2,577,452 4,286,178 4,719,502 3,699,412 3,886,425

Current liabilities and provisions 3,823,755 4,351,581 6,988,045 6,582,603 6,209,711 7,113,230

Deferred tax (Asset)/Liability 709,477 983,804 897,467 32,087 612,818 1,376,662

Loans 16,556,083 17,833,194 31,996,450 34,983,525 29,019,090 28,139,790

Of which:

Secured loans 1,684,000 2,131,753 732,000 2,005,361 603,433 600,000

Unsecured loans 14,872,083 15,701,441 31,264,450 32,978,164 28,415,657 27,539,790

Subordinated debt - - 2,640,000 2,840,733 3,080,775 3,341,100

Net worth 1,350,578 2,282,273 1,866,333 672,556 2,164,421 2,848,336

Of which:

Share capital 720,889 1,419,177 1,419,177 1,419,177 1,419,177 1,419,177

Summary of Key Financial Ratios

As of March 31, As of

September

2000 2001 2002 2003 2004 30, 2004

EPS

(1)

(Basic) (Rs.) 2.66 4.25 (5.34) (17.84) 19.44 8.70

(4)

Cash EPS

(2)

(Basic) (Rs.) 32.50 41.75 45.05 50.03 90.65 41.96

(4)

Net asset value per Equity Share (Rs.) 18.73 21.97 16.20 (1.64) 17.81 26.46

Return on Net Worth 14.20% 13.95% (16.67%) (177.75%) 68.93% 24.01%

EBITDAR margin

(3)

26.52% 24.59% 26.89% 24.18% 31.64% 29.64%

(1) Earnings per Equity Share.

(2) Net profit after tax and annualized return on preference capital before depreciation and provision for obsolesence divided by total

number of Equity Shares.

(3) EBITDAR margin is calculated by dividing EBITDAR for the relevant period by Operating Revenues for such period.

(4) The EPS for September 30, 2004 is not comparable with that of other periods as it is not annualized.

Summary of Operating Data

As of and for the

As of and for the year six months ended

ended March 31, September 30,

2002 2003 2004 2003 2004

Passengers carried (millions) 5.82 6.41 6.91 3.27 3.78

ASKMs

(1)

(millions) 7,780 8,496 9,162 4,542 4,796

RPKMs

(2)

(millions) 4,777 5,291 5,852 2,771 3,245

Passenger Load Factor

(3)

(%) 61.4% 62.3% 63.9% 61.0% 67.7%

Number of aircraft at period end 38.0 41.0 41.0 39.0 41.0

Average number of aircraft during period 34.9 38.9 40.8 40.6 41.0

Number of domestic stations served 44 40 41 (+1) 40 42 (+2)

(+ international stations served)

Aircraft utilization

(4)

(hours/day per aircraft) 9.66 9.41 9.46 9.48 9.84

Average stage length (kilometres)

(5)

792 805 816 821 818

(1) Available Seat Kilometers; represents the aircraft seating capacity multiplied by the number of kilometres the seats are flown.

(2) Revenue Passenger Kilometers; represents the number of kilometres flown by revenue passengers.

(3) Passenger Load Factor represents Revenue Passenger Kilometres expressed as a percentage of Available Seat Kilometres.

(4) The average number of Block hours operated per day per aircraft for the total aircraft fleet.

(5) The average number of kilometres flown per flight.

RECENT DEVELOPMENTS

The unaudited Balance Sheet as of December 31, 2004, the Statement of Profit and Loss and the Statement of Cash Flows

for the nine months ended December 31, 2004 and 2003, together with the review report prepared by Deloitte Haskins &

Sells and Chaturvedi & Shah, dated February 2, 2005 relating to such financial statements of the Company are included

on page 258 of this Prospectus. These unaudited financial statements have not been restated in accordance with SEBI

Guidelines.

The unaudited Balance Sheet of the Company as at December 31, 2004, and the related Statement of Profit and Loss for

the nine months ended December 31, 2004 are as follows:

CONDENSED BALANCE SHEET AS AT DECEMBER 31, 2004

1. Sources of Funds As at

December 31, 2004

(Rs. thousands) (Rs. thousands)

1. Shareholders’ Funds :

a) Share Capital

Equity

Preference 720,889

698,288

1,419,177

b) Reserves and Surplus 4,237,100

((including Revaluation Reserve Rs. 2,768,069 (previous year Rs. 3,875,685))

5,656,277

2. Subordinated Debt 3,341,100

3. Loan Funds :

a) Secured Loans 600,000

b) Unsecured Loans 26,393,389

26,993,389

4. Deferred Tax Liability

1,304,458

Total 37,295,224

II. Application of Funds

1. Fixed Assets;

a) Gross Block

Tangible assets 51,510,224

Intangible assets 114,877 51,625,101

b) Less : Depreciation/ Amortisation 24,613,366

c) Net Block 27,011,735

d) Capital Work-in-progress 221,332

27,233,067

2. Investments 4,546,364

3. Current Assets, Loans and Advances:

a) Inventories 3,242,887

b) Sundry Debtors 3,021,356

c) Cash and Bank Balances 6,917,659

d) Loans and Advances 1,909,039

15,090,941

Less : Current Liabilities and Provisions

a) Current Liabilities 6,622,396

b) Provisions 2,952,752

9,575,148

Net Current Assets 5,515,793

4. Profit & Loss Account _

Total 37,295,224

CONDENSED PROFIT AND LOSS ACCOUNT FOR THE NINE MONTHS PERIOD ENDED DECEMBER 31, 2004

For the nine

months period

ended December 31,

2004

(Rs. thousands) (Rs. thousands)

INCOME :

Operating Revenues 31,346,550

Non-Operating Revenues 629,093

Total 31,975,643

EXPENDITURE :

Employees Remuneration and Benefits 2,677,551

Aircraft Fuel Expenses 7,847,695

Selling & Distribution Expenses 3,979,951

Other Operating Expenses` 7,025,475

(including Maintenance, Airport Charges, etc)

Aircraft Lease Rentals 1,495,125

Depreciation 4,146,218

Less : Depreciation on amount added on Revaluation charged to

Revaluation Reserve 726,766

3,419,452

Interest 1,853,126

Total 28,298,375

3,677,268

PROFIT BEFORE TAXATION

Provision for Taxation

Current Tax (including provision for Wealth Tax Rs. 410, 290,410

Previous Period Rs. 300)

Deferred Tax 797,007

PROFIT AFTER TAXATION 2,589,851

GENERAL INFORMATION

Authority for the Offer

Jet Airways

The Fresh Issue by the Company has been authorized by a resolution of its Board of Directors passed at their meeting

held on November 4, 2004, subject to the approval of the shareholders through a special resolution to be passed

pursuant to Section 81(1A) of the Companies Act. The shareholders approved the Fresh Issue of Equity Shares at an

EGM of the shareholders of the Company held on December 28, 2004. Pursuant to the authority granted by the Board of

Directors of the Company at its meeting held on November 4, 2004, a Committee of the Board approved the Fresh Issue

by the Company on January 4, 2005.

Selling Shareholder

The Offer for Sale has been authorized by a resolution of the board of directors of Tail Winds Limited dated December 28,

2004, which has also (i) authorized the Company to take decisions on its behalf in relation to the Offer and (ii) appointed

the Company to act as its attorney with respect to any matter in connection with the Offer. The Selling Shareholder

assumes no responsibility for any of the statements made by the Company in this Prospectus relating to the Company, its

business and related disclosures, except statements relating to the Selling Shareholder.

Prohibition by SEBI

Our Company, our Directors, our promoters, the directors and persons in control of our promoters, our group companies,

other companies promoted by our promoters and companies with which our Company’s Directors are associated as

directors, have not been prohibited from accessing or operating in the capital markets or restrained from buying, selling

or dealing in securities under any order or direction passed by SEBI.

Eligibility for the Offer

Our Company is eligible for the Offer in accordance with Clause 2.2.2 of the SEBI Guidelines as described below:

l The Offer is made through the 100% Book Building Process wherein a minimum of 50% of the Net Offer will be

allotted to QIBs; and

l The post-Offer capital of the Company shall be more than Rs.100 million.

Further, the Offer is subject to the fulfillment of the following conditions as required under Clause 19(2)(b) of the

Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”):

l A minimum of 2,000,000 Equity Shares (excluding reservations, firm allotments and promoters contribution) are offered

to the public;

l The Net Offer size, which is the Offer Price multiplied by the number of Equity Shares offered to the public, is a

minimum of Rs.1,000 million; and

l The Net Offer is made through the Book Building Process with allocation of 60% of the Offer size to QIBs as defined

under the SEBI Guidelines.

The Company undertakes that the number of transferees and allottees in the Offer shall be at least 1,000. Otherwise, the

entire application money shall be refunded forthwith. Further, if at least 60% of the Net Offer cannot be allotted to QIBs,

then the entire application money shall be refunded forthwith. In case of delay, if any, in refund, the Company shall pay

interest on the application money at the rate of 15% per annum for the period of delay.

The promoters, the Company, group companies and associate companies are not defined as willful defaulters by the RBI/

Government of India authorities and there are no violations of securities laws committed by them in the past or pending

against them. No penalty has been imposed by SEBI and other regulatory bodies against us, our Directors, our promoters

and other companies promoted by our promoters.

Disclaimer Clause

AS REQUIRED, A COPY OF THE PROSPECTUS HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY

UNDERSTOOD THAT SUBMISSION OF THE PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR

CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY

RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH

THE OFFER IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR

OPINIONS EXPRESSED IN THE PROSPECTUS. THE BOOK RUNNING LEAD MANAGERS, DEUTSCHE EQUITIES

INDIA PRIVATE LIMITED, HSBC SECURITIES AND CAPITAL MARKETS (INDIA) PRIVATE LIMITED, UBS

SECURITIES INDIA PRIVATE LIMITED, CITIGROUP GLOBAL MARKETS INDIA PRIVATE LIMITED, DSP MERRILL

LYNCH LIMITED AND KOTAK MAHINDRA CAPITAL COMPANY LIMITED, HAVE CERTIFIED THAT THE

DISCLOSURES MADE IN THE PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH

SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES AS FOR THE TIME BEING IN FORCE. THIS

REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN

INVESTMENT IN THE PROPOSED OFFER. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE

COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL

RELEVANT INFORMATION IN THE PROSPECTUS, THE BOOK RUNNING LEAD MANAGERS ARE EXPECTED TO

EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER COMPANY DISCHARGES ITS RESPONSIBILITY

ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS,

DEUTSCHE EQUITIES INDIA PRIVATE LIMITED, HSBC SECURITIES AND CAPITAL MARKETS (INDIA) PRIVATE

LIMITED, UBS SECURITIES INDIA PRIVATE LIMITED, CITIGROUP GLOBAL MARKETS INDIA PRIVATE LIMITED,

DSP MERRILL LYNCH LIMITED AND KOTAK MAHINDRA CAPITAL COMPANY LIMITED HAVE FURNISHED TO

SEBI, A DUE DILIGENCE CERTIFICATE DATED JANUARY 7, 2005 IN ACCORDANCE WITH THE SEBI (MERCHANT

BANKERS) REGULATIONS, 1992, WHICH READS AS FOLLOWS:

“WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATIONS LIKE

COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABOURATORS, ETC. AND OTHER

MATERIALS IN CONNECTION WITH THE FINALISATION OF THE PROSPECTUS PERTAINING TO THE SAID

OFFER.

ON THE BASIS OF SUCH EXAMINATION AND DISCUSSIONS WITH THE COMPANY, IT’S DIRECTORS AND

OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE

OBJECTS OF THE OFFER, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE

DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY, WE

CONFIRM THAT:

(A) THE PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS

AND PAPERS RELEVANT TO THE OFFER;

(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID OFFER AS ALSO THE GUIDELINES,

INSTRUCTIONS, ETC. ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY

IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

INVESTORS TO MAKE A WELL-INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED

OFFER.

WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE PROSPECTUS ARE

REGISTERED WITH SEBI AND THAT TILL DATE SUCH REGISTRATIONS ARE VALID.

WHEN UNDERWRITTEN WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO

FULFIL ANY UNDERWRITING COMMITMENTS.

WE CERTIFY THAT WRITTEN CONSENT FROM SHAREHOLDERS HAS BEEN OBTAINED FOR INCLUSION OF

THEIR SECURITIES AS PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN AND THE SECURITIES

PROPOSED TO FORM PART OF THE PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN HAVE NOT BEEN

DISPOSED/SOLD/TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF

FILING THE DRAFT RED HERRING PROSPECTUS WITH SEBI TILL THE DATE OF COMMENCEMENT OF LOCK-

IN PERIOD AS STATED IN THE PROSPECTUS.

ALL LEGAL REQUIREMENTS PERTAINING TO THE OFFER WILL BE COMPLIED WITH AT THE TIME OF FILING

OF THE PROSPECTUS WITH THE REGISTRAR OF COMPANIES, MUMBAI, MAHARASHTRA, IN TERMS OF

SECTION 56, SECTION 60 AND SECTION 60B OF THE COMPANIES ACT.

THE FILING OF THE PROSPECTUS DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES

UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING

SUCH STATUTORY AND/OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE

PROPOSED OFFER. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP AT ANY POINT OF TIME, WITH THE

BOOK RUNNING LEAD MANAGERS, ANY IRREGULARITIES OR LAPSES IN THE PROSPECTUS.”

Caution

The Industrial Policy prohibits foreign airlines from having any direct or indirect equity participation in a domestic airline.

The Industrial Policy does not clearly define the scope of the terms “direct or indirect equity participation”. In addition,

our permission to operate scheduled services granted by the DGCA and the guidelines issued by the DGCA from time to

time, including AIC No. 4 specifies the following restrictions:

l a foreign investing institution or other entity that proposes to hold equity in the domestic air transport sector must

not be a subsidiary of a foreign airline;

l a foreign financial institution or other entity that proposes to hold equity in the domestic air transport sector must

not have foreign airlines as its shareholder;

l the substantial ownership and effective control of companies operating scheduled services must be vested in Indian

nationals; and

l a foreign investing institution or other entity that proposes to hold equity in the domestic air transport sector may

have representation on the board of directors of a domestic airline company, but such representation shall not exceed

one-third of the total strength of such board.

In addition, there are various restrictions under Indian laws and regulations applicable to foreign investment in a domestic

airline. For more information relating to foreign investment restrictions in our Company, see the section entitled “Regulations

and Policies – Foreign Ownership Restrictions” on page 126 of this Prospectus.

No person shall make a Bid in pursuance of this Offer unless such person is eligible to acquire Equity Shares in

compliance with all applicable laws, rules, regulations, guidelines and approvals, including, without limitation, AIC No. 4.

Investors should note that:

l Equity Shares offered in the Fresh Issue will be allotted only to Indian residents, SEBI registered FIIs and QIBs

registered with SEBI, and will not be allotted to multilateral and bilateral developmental financial institutions or

other non-resident persons or entities; and

l Equity Shares offered by Tail Winds in the Offer for Sale will be allotted only to Indian residents and NRIs.

Investors should note that this Offer is not being made to any multilateral or bilateral development financial institution

or to any OCB.

Investors that bid in the Offer will be required to confirm and will be deemed to have represented to the Company, the

Selling Shareholder, the Underwriters and their respective directors, officers, agents, affiliates and representatives that

they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the

Company and will not offer, sell, pledge or transfer the Equity Shares of the Company to any person who is not eligible

under applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company. The

Company, the Selling Shareholder, the Underwriters and their respective directors, officers, agents, affiliates and

representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to

acquire Equity Shares of the Company.

The Company, its Directors, the Selling Shareholder and the BRLMs accept no responsibility for statements made otherwise

than in this Prospectus or in the advertisements or any other material issued by or at our instance and anyone placing

reliance on any other source of information, including our website, www.jetairways.com, would be doing so at his or her

own risk.

The BRLMs accept no responsibility, save to the limited extent as provided in the Memorandum of Understanding

entered into among the BRLMs, the Company and the Selling Shareholder (acting through the Company, its duly constituted

attorney), and the Underwriting Agreement to be entered into among the Underwriters, the Company and the Selling

Shareholder (acting through the Company, its duly constituted attorney).

All information shall be made available by the BRLMs and the Company to the public and investors at large and no

selective or additional information would be available for a section of the investors in any manner whatsoever, including

at road show presentations, in research or sales reports, at bidding centers or elsewhere.

Disclaimer in Respect of Jurisdiction

The Offer is being made in India to persons resident in India including Indian nationals resident in India who are majors,

Hindu Undivided Families (HUFs), companies, corporate bodies and societies registered under the applicable laws in India

and authorized to invest in shares, Indian mutual funds registered with SEBI, Indian financial institutions, scheduled

commercial banks, regional rural banks, co-operative banks (subject to RBI permission), trusts registered under the Societies

Registration Act, 1860, as amended, or any other law relating to trusts, and who are authorized under their constitution

to hold and invest in equity shares, venture capital funds (“VCFs”) registered with SEBI, State Industrial Development

Corporations, permitted insurance companies, provident funds with a minimum corpus of Rs. 250 million and pension

funds with a minimum corpus of Rs. 250 million and to permitted non-residents including NRIs, FIIs registered with SEBI

and foreign venture capital investors (“FVCIs”) registered with SEBI, provided that they are eligible under all applicable

laws and regulations to hold Equity Shares of the Company.

This Prospectus does not, however, constitute an offer to sell or an invitation to subscribe to Equity Shares offered

hereby in any jurisdiction other than India or to any person to whom it is unlawful to make an offer or invitation in such

jurisdiction. Any person into whose possession this Prospectus comes is required to inform himself or herself about, and

to observe, any relevant restrictions. Any dispute arising out of this Offer will be subject to the exclusive jurisdiction of

appropriate court(s) in Mumbai only.

No action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that

purpose, except that the Draft Red Herring Prospectus has been submitted to SEBI for observations and the SEBI has

given its observations. Accordingly, the Equity Shares may not be offered or sold, directly or indirectly, in any jurisdiction,

except in accordance with the legal requirements applicable in such jurisdiction, and this Prospectus may not be distributed

in any jurisdiction other than India. Neither the delivery of this Prospectus nor any sale hereunder shall, under any

circumstances, create any implication that there has been no change in the affairs of our Company since the date hereof

or that the information contained herein is correct as of any time subsequent to this date.

Disclaimer Clause of the NSE

As required, a copy of the Draft Red Herring Prospectus was submitted to NSE. NSE has, pursuant to its letter dated

January 20, 2005, given permission to the Company to use the NSE’s name in this Prospectus as one of the stock

exchanges on which this Company’s securities are proposed to be listed subject to the Company fulfilling criteria for

listing including the criteria related to the paid-up capital and market capitalization (i.e., the paid-up capital shall be not

less than Rs.100 million and the market capitalization shall be not less than Rs.250 million at the time of listing). The NSE

has scrutinized the Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the

aforesaid permission to this Company. It is to be distinctly understood that the aforesaid permission given by NSE

should not in any way be deemed or construed to mean that this Prospectus has been cleared or approved by NSE; nor

does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this

Prospectus; nor does it warrant that this Company’s securities will be listed or will continue to be listed on the NSE; nor

does it take any responsibility for the financial or other soundness of this Company, its promoters, its management or any

scheme or project of this Company.

Every person who desires to apply for or otherwise acquires any securities of the Company may do so pursuant to

independent inquiry, investigation and analysis and shall not have any claim against the NSE whatsoever by reason of

any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition

whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever.

Disclaimer Clause of the BSE

As required, a copy of the Draft Red Herring Prospectus was submitted to BSE. BSE has pursuant to its letter dated

January 20, 2005, given permission to this Company to use BSE’s name in this Prospectus as one of the stock exchanges

on which this Company’s securities are proposed to be listed. BSE has scrutinized the Draft Red Herring Prospectus for

its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company.

BSE does not in any manner:

l warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus; or

l warrant that this Company’s securities will be listed or will continue to be listed on BSE; or

l take any responsibility for the financial or other soundness of this Company, its promoters, its management or any

scheme or project of this Company;

and it should not for any reason be deemed or construed to mean that this Prospectus has been cleared or approved by

BSE. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to

independent inquiry, investigation and analysis and shall not have any claim against BSE whatsoever by reason of any

loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether

by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.

Filing

A copy of the Prospectus, along with the documents required to be filed under Section 60B of the Companies Act, has

been delivered for registration to the RoC and a copy of the Prospectus to be filed under Section 60 of the Companies

Act has been delivered for registration with the RoC. A copy of this Prospectus has been filed with the Corporation

Finance Department of SEBI at Ground Floor, Mittal Court, “A” Wing, Nariman Point, Mumbai 400 021.

Listing

Applications have been made to the NSE and BSE for permission to deal in and for an official quotation of our Equity

Shares. NSE will be the Designated Stock Exchange.

If the permissions to deal in and for an official quotation of our Equity Shares are not granted by any of the Stock

Exchanges mentioned above, our Company will forthwith repay, without interest, all moneys received from the applicants

in pursuance of this Prospectus. If such money is not repaid within eight days after our Company becomes liable to

repay it, i.e., from the date of refusal or within 70 days from the Bid/Offer Closing Date, whichever is earlier, then the

Company, and every Director of the Company who is an officer in default shall, on and from such expiry of eight days,

be liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under

Section 73 of the Companies Act.

Our Company, with the assistance of the BRLMs, shall ensure that all steps for the completion of the necessary formalities

for listing and commencement of trading at all the Stock Exchanges mentioned above are taken within seven working

days of finalization and adoption of the basis of allotment for the Offer.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68A of the Companies

Act, which is reproduced below:

“Any person who:

(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or

(b) otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in a

fictitious name,

shall be punishable with imprisonment for a term which may extend to five years.”

Minimum Subscription

If we do not receive the minimum subscription of 90% of the Fresh Issue amount, including devolvement of Underwriters,

if any, within 60 days from the Bid/Offer Closing Date, our Company shall forthwith refund the entire subscription amount

received. If there is a delay beyond eight days after our Company becomes liable to pay the amount, our Company shall

pay interest prescribed under Section 73 of the Companies Act.

Withdrawal of the Offer

Our Company, in consultation with the BRLMs, reserves the right not to proceed with the Offer any time after the Bid/

Offer Opening Date without assigning any reason therefor.

Letters of Allotment or Refund Orders

We shall give credit to the beneficiary account with depository participants within two working days of finalization of the

basis of allotment of Equity Shares. We shall dispatch refund orders, if any, of value up to Rs.1,500, by “Under Certificate

of Posting”, and will dispatch refund orders above Rs.1,500, if any, by registered post or speed post at the sole or first

Bidder’s sole risk within 15 days of the Bid/Offer Closing Date.

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Guidelines, we further

undertake that:

l Allotment and transfer of Equity Shares will be made only in dematerialized form within 15 days from the Bid/Offer

Closing Date;

l Dispatch of refund orders will be done within 15 days from the Bid/Offer Closing Date; and

l We shall pay interest at 15% per annum (for any delay beyond the 15 day time period as mentioned above), if

allotment or transfer is not made, refund orders are not dispatched and/or demat credits are not made to investors

within the 15-day time period prescribed above.

We will provide adequate funds required for dispatch of refund orders or allotment advice to the Registrar to the Offer.

Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by us, as an Escrow

Collection Bank and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques,

pay orders or demand drafts at other centers will be payable by the Bidders.

Offer Program

BID/OFFER OPENED ON : FEBRUARY 18, 2005

BID/OFFER CLOSED ON : FEBRUARY 24, 2005

Bids and any revision in Bids shall be accepted only between 10 a.m. and 3 p.m. (Indian Standard Time) during the Bid/

Offer Period as mentioned above at the bidding centers mentioned on the Bid cum Application Form except that on the

Bid/Offer Closing Date, the Bids shall be accepted only between 10 a.m. and 1 p.m. (Indian Standard Time) and uploaded

until such time as may be permitted by the NSE and BSE on the Bid/Offer Closing Date.

In case of revision in the Price Band, the Bid/Offer Period will be extended for three additional days after revision of

Price Band subject to the Bidding/Offer Period not exceeding 13 days. Any revision in the Price Band and the revised

Bid/Offer Period, if applicable, will be widely disseminated by notification to the NSE and BSE, by issuing a press

release, and also by indicating the change on the web site of the BRLMs and at the terminals of the Syndicate.

Book Running Lead Managers to the Offer

Statement of Inter-Se Allocation of Responsibility

The responsibilities and co-ordination for various activities in this Offer have been distributed among the BRLMs as

under:

Sr. Activities Responsibility Co-ordinator

No.

1. Capital structuring with the relative components and formalities Deutsche Equities, UBS

such as type of instruments etc. HSBC, UBS,

Citigroup, DSPML,

KMCC

2. Due diligence of our Company’s operations/ management/ Deutsche Equities, HSBC

business plans/ legal etc. Drafting and design of the Red HSBC, UBS,

Herring Prospectus and of statutory advertisement including Citigroup, DSPML,

memorandum containing salient features of the Prospectus. The KMCC

BRLMs shall ensure compliance with stipulated requirements and

completion of prescribed formalities with the Stock Exchanges,

RoC and SEBI including finalization of Prospectus and RoC filing

of the same.

3. Drafting and approval of all publicity material other than Deutsche Equities, Citigroup

statutory advertisement as mentioned in (2) above including HSBC, UBS,

corporate advertisement, brochure, roadshow presentations, FAQs, Citigroup, DSPML,

corporate films etc. KMCC

4. Appointment of other intermediaries viz. Registrar(s), Printers, Deutsche Equities, KMCC

Advertising Agency and Bankers to the Offer HSBC, UBS,

Citigroup, DSPML,

KMCC

5. International Institutional Marketing of the Offer, which will Deutsche Equities, Deutsche

cover, inter alia, HSBC, UBS, Equities

Finalizing the list and division of investors for one to one Citigroup, DSPML,

meetings; and Finalizing roadshow schedule and investor KMCC

meeting schedules

6. Domestic Institutional Marketing of the Offer, which will cover, Deutsche Equities, DSPML

inter alia, HSBC, UBS,

Finalizing the list and division of investors for one to one Citigroup, DSPML,

meetings; and KMCC

Finalizing roadshow schedule and investor meeting schedules

Deutsche Equities

India Private

Limited

DB House

Hazarimal Somani Marg

Fort,

Mumbai 400 001

Tel : 91 22 5658 4600

Fax: 91 22 2200 6765

HSBC Securities

and Capital Markets

(India) Private

Limited

52/60, Mahatma

Gandhi Road, Fort,

Mumbai 400 001

Tel : 91 22 2267 4921

Fax: 91 22 2263 1984

UBS Securities

India Private

Limited

Floor,

Hoechst House

Nariman Point

Mumbai 400 021

Tel : 91 22 2286 2000

Fax : 91 22 2281 4676

Citigroup Global

Markets India

Private Limited

Floor, Bakhtawar

229 Nariman Point

Mumbai 400 021

Tel : 91 22 5631 9982

Fax : 91 22 5631 9803

Email:

DSP Merrill Lynch

Limited

Mafatlal Centre,

Floor,

Nariman Point

Mumbai 400 021

Tel : 91 22 2265 1702

Fax : 91 22 2262 1187

Email:

Kotak Mahindra

Capital Company

Limited

3rd Floor, Bakhtawar

229 Nariman Point

Mumbai 400 021

Tel : 91 22 5634 1100

Fax: 91 22 2282 6632

Email:

Sr. Activities Responsibility Co-ordinator

No.

7 Non-Institutional and Retail Marketing of the Offer, which will Deutsche Equities, KMCC

cover, inter alia, HSBC, UBS,

Formulating marketing strategies, preparation of publicity budget; Citigroup, DSPML,

Finalizing Media and PR strategy; KMCC

Finalizing centres for holding conferences for brokers etc.;

Finalizing collection centres; and

Follow-up on distribution of publicity and Offer material

including form, prospectus and deciding on the quantum of the

Offer material

8 Appointment of Syndicate members Deutsche Equities, KMCC

HSBC, UBS,

Citigroup, DSPML,

KMCC

9 Managing the Book, co-ordination with Stock Exchanges for Deutsche Equities, UBS

book building software, bidding terminals and mock trading and HSBC, UBS,

finalization of pricing and institutional allocation in consultation Citigroup, DSPML,

with the Company KMCC

10. The post bidding activities including management of escrow Deutsche Equities, DSPML

accounts, coordination non-institutional allocation, intimation of HSBC, UBS,

allocation and dispatch of refunds to Bidders etc. The post Citigroup, DSPML,

Offer activities will involve essential follow up steps, which KMCC

include the finalization of listing of instruments and dispatch of

certificates and demat delivery of shares, with the various

agencies connected with the work such as the Registrar to the

Offer and Bankers to the Offer and the bank handling refund

business. The merchant banker shall be responsible for ensuring

that these agencies fulfil their functions and enable it to discharge

this responsibility through suitable agreements with the Company

Syndicate Member(s)

Kotak Securities Limited

Bakhtawar, 1st Floor

229 Nariman Point

Mumbai 400 021

India

Tel: (91) 22 5634 1100

Fax: (91) 22 5630 3927

Karvy Stock Broking Limited

529, Road No. 4, Banjara Hills,

Hyderabad-500 034

Tel: (91) 40 2335 1988 / 2335 1380

Fax: (91) 40 2335 1989

Registered Office of the Company

Jet Airways (India) Limited

SM Centre, Andheri Kurla Road,

Andheri (East)

Mumbai 400 059, India

Tel: 91 22 2850 5080

Fax: 91 22 2856 0622

Company Secretary and Compliance Officer

Mr. A.R. Rajaram

Jet Airways (India) Limited

SM Centre, Andheri Kurla Road

Andheri (East)

Mumbai 400 059, India

Tel: (91) 22 28527744

Fax: (91) 22 28527745