Fuel cost spike lands Jet in the red in Q4

The country's largest airline Jet Airways today reported a consolidated loss of Rs 124.5 crore for the fourth quarter ended March 31, 2011.

The company had posted a profit of Rs 58.6 crore in the corrsponding period last fiscal on rising fuel cost that soared by a whopping 51%.

The loss is despite the airline improving its cost per seat km and implementing strict cost control measures across various areas along with effective route rationalising, the Naresh Goyal-promoted airline said in a statement here.

A 14.3% jump in revenue could not offset the 51% spike in fuel cost.

While revenue rose to Rs 3,288 crore in the reporting quarter, fuel cost rose to Rs 1,279.7 crore against Rs 846.3 crore in Q4 of FY10, a growth of a full 51%, the airline said.

Accordingly, the weight of fuel cost in the overall cost too rose by a full 7%age points to 39% in the March quarter, which was just 32% y-o-y.

Going forward, the airline warned that the full impact of the crude shock would only be known in the April-June quarter of the current fiscal.

"The recent dramatic rise in crude price has severely impacted margins and softening in May should help. But the full impact of all the fare increase and surcharge increases will come through only in Q1 of FY12," the airline said.

"To the extent, crude price and fares continue to remain higher, it could impact some traffic growth in the short-term, though the medium-term growth outlook remains intact," it added.

However, for the full year, the group has massively narrowed its losses to Rs 85.84 crore from Rs 420 crore in FY10 on a total income of Rs 14,737 crore during the year compared to Rs 12,000 crore in the previous fiscal, a growth of 20.3%.

"Airlines across the world have been impacted by the rude crude shock lately and Jet is no exception. Though we would have liked to pass through all of the fuel price increases, it was not possible to do that in the short-term," Jet chief executive Nikos Kardassis said.