Turbulent times persist in the aviation sector. Jet Airways, the largest domestic carrier by market share, announced a Rs 101-crore net loss on a standalone basis for the third quarter of financial year 2012.
The airline had made a profit of Rs 118 crore for the same period last year. However, a combination of 60 per cent increase in fuel costs and rupee depreciation has eroded profits. On a consolidated basis the airline lost Rs 122 crore.
For Jet, this was the third successive quarterly loss. Analysts say the losses could have been higher except for an unrealised foreign exchange gain of Rs 179 crore due to changed accounting standards and Rs 226 crore 'other income' from sale of a Bandra Kurla Complex plot and lease of aircraft engines.
Revenue grew 13.6 per cent to Rs 3,986 crore on the back of increases of 16.4 per cent and 12 per cent in the domestic and international sectors. Yields also improved due to higher fares and peak season demand. "Yield improvements were not sufficient to offset fuel price rise. In the international sector, margins fell on a sequential basis,'' an analyst said.
"High fuel prices together with the depreciating Indian rupee versus the dollar have pulled down operating results to an extent. However, yield improvements due to seasonality and a narrowing gap in demand supply imbalances have helped operating profits,'' said Jet chief executive officer Nikos Kardassis.
Jet has recorded earnings before interest, taxes, depreciation and amortisation (Ebitda) of Rs 209 crore.
The airline will merge its two low-cost brands (Jet Konnect and JetLite) and carry out sale and lease back of its planes in this quarter.
"The transition from JetLite to Jet Konnect will enable us to consolidate our market leadership position with two strong brands,'' the company said. JetLite, the company's no-frills subsidiary, has been struggling against other low-cost carriers and merging both brands has been on the radar for some time. The airline will now have a full service brand and Jet Konnect as its no-frills brand.
According to sources, the merger is expected to happen in February.
The sale and lease back will generate cash to pay off debt, the airline said.
He said the airline will carry out innovative marketing initiatives and focus on cost cutting and process improvement measures.
The airline expects 12-15 per cent domestic growth in medium term. On the international sectors, too, has recorded 80 per cent loads and there has been no slow down in bookings from the US and Europe.