Loss widens to Rs 354 crore in what is traditionally a weak quarter for airlines
Hit by high fuel cost and a weakened rupee, private carrier Jet Airways (India) Ltd posted a consolidated net loss of Rs 354 crore in the March quarter, compared with a loss of Rs 200 crore in the year-ago period.
For 2011-12, Jet Airways’ consolidated loss stood at Rs 1,420 crore, against a Rs 85-crore loss in the year before, the company said in a statement on Thursday.
The company said fuel costs jumped 42 per cent year-on-year in the March quarter.
While the 24 per cent jump in revenue during the quarter was in the line with analysts’ expectations, the bottom line performance was better than estimations. The stock ended flat in on Thursday's trade at Rs 321.
Traditionally, the fourth quarter is a weak season for airlines and travel companies. However, Jet Airways registered significant passenger, revenue and yield growth in the quarter, as Kingfisher Airlines Ltd, another private carrier, curtailed its domestic services to around 100 flights from 400 six months ago. Load factors were up 510 basis points y-o-y to 83 per cent. To reach break-even, the company needed load factors of 91 per cent.
Yields grew 9.6 per cent y-o-y on a stand-alone basis. Both Jet Airways and its subsidiary JetLite (now renamed as Jet Konnect) registered revenue growth of around 24 per cent to Rs 4,638 crore in the March quarter, compared with Rs 3,729 crore in the year-ago quarter. The growth was aided by fare increases and a sharp jump in load factors.
“Rupee depreciation and fuel prices have impacted the quarterly results. However, capacity reduction in the industry has helped raise fares and improve yields,’’ said Jet Airways chief executive officer Nikos Kardassis.
The company also said it would discontinue loss-making routes.
Capacity reduction in the industry has helped domestic airlines to increase fares and improve yields. The full impact of the same would be felt in the current quarter. “We have not seen any adverse effect on the passenger traffic flow. Rupee depreciation and crude oil prices continue to be a cause of concern. This, coupled with a sluggish economy, could impact traffic growth to some extent in the short to medium term, as the discretionary spending on travel could get affected,’’ the airline said.
The airline also told its investors that it appointed a valuer to assess exposure in JetLite, whose performance had been affected due to high operating costs. The unit continues to have a negative net worth. Jet Airways has total investment of around Rs 1,645 crore in JetLite in the form of equity and preference shares. The valuer has recommended that no impairment in exposure is required.
Amid controversies over allegations of irregularities in allocation of coal mines, the Coal Ministry has identified 54 blocks to be allocated to ...