The private carrier’s net profit on a standalone basis stood at Rs 49.6 crore, as against Rs 549 crore in the same quarter last year. Its revenue from operations grew a modest 3 per cent to Rs 5,626 crore, but a 58 per cent decline in other income led to the sharp fall in profit.
In the second quarter of 2016-17, the airline had posted a profit of Rs 190 crore from the sale and lease of aircraft as other income, which fell to zero in Q2FY18. Foreign currency fluctuation loss and impairment loss of Rs 56.57 crore on account of loans to its subsidiary JetLite also contributed to the decline.
The airline’s profit came below Bloomberg estimates, which had pegged it at Rs 99 crore. Jet’s performance is in contrast to its listed peers IndiGo and SpiceJet, which saw fourfold and 79 per cent rise, respectively, in their net profit.
Vinay Dube, chief executive officer, Jet Airways, said, “Weak demand in the Gulf continues, while low fares as well as yields in the domestic market have limited the ability to offset the increase in fuel prices. In line with our commitment to offer guests a superior experience, we continue to grow our domestic presence while keeping a tight control on costs.”
Jet Airways said it also derived significant operational and business advantages via synergies with its strategic partner Etihad Airways, besides other codeshare partnerships.
The airline’s focus on connecting global travellers as a result of its cooperation with codeshare partners, such as Air France-KLM, Virgin Atlantic, and Delta Air Lines, drew robust dividends, and its percentage of alliance revenues went up by 8 per cent during the recent quarter.
The airline said it was its tenth successive profitable quarter, backed by growth in capacity and revenues, and a reduction in non-fuel costs.
During the quarter, Jet also successfully reduced its net debt by Rs 194 crore. The airline said its non-fuel unit costs declined 5 per cent in line with a planned 12-15 reduction in costs. Jet also strengthened its domestic network by augmenting services between cities such as Jaipur, Lucknow, Chandigarh, Dehradun, Udaipur, and Indore. It also announced the appointment of Kevin Knight, Etihad's chief strategy and planning officer, as a board member, filling up a post made vacant by the resignation of Etihad chief financial officer James Rigney.
In September, Harsh Mohan, Etihad group’s chief of support services, was named as a board member in place of CEO James Hogan, who quit the Gulf airline. Etihad owns 24 per cent in the airline.