Jet loss widens 109%

Compensation from Boeing, sale & leaseback earnings prevent a steeper fall

Compensation of Rs 293 crore from Boeing for delays in the delivery of the Boeing 787 and profit from the sale and leaseback of London Heathrow airport slots helped Jet Airways restrict its loss to Rs 743 crore for the quarter ended March. The airline’s loss rose 109 per cent to Rs 743 crore, against a loss of Rs 354 crore in the year-ago period, owing to an increase in other expenses and interest.

Jet had placed an order for 10 Boeing 787 aircraft, which it was scheduled to receive in 2014. Boeing, however, said the deliveries weren’t possible before 2018.

It is learnt from the sale and leaseback of Heathrow slots, the airline earned $45 million.

Jet Airways’ revenue for the quarter ended March stood at Rs 3,990 crore, against Rs 4,092 crore in the corresponding quarter last year, owing to a fall in capacity and passengers. On a standalone basis, the airline’s loss stood at Rs 495 crore. Subsidiary JetKonnect posted a loss of Rs 248 crore, a rise of 342 per cent, against a net loss of Rs 56 crore in the corresponding period last year.

Acting chief executive Hameed Ali said, “The sluggish economic scenario and high yields have resulted in a decrease in market demand and capacity. Rupee depreciation, high fuel prices, an increase in landing & navigation costs and an increase in cost of operations, including the impact of one-time costs and aircraft on the ground, impacted the quarterly results.”

Last year, there were two rounds of fare rises and the airline saw yield growth of 25 per cent. Though the demand for air travel was slow because of an increase in fares, the airline expects it to rise 10-12 per cent on account of capacity moderation.

During the quarter, the airline faced high fuel prices, rupee depreciation and an increase in the cost of operations. Also, a temporary slowdown in demand resulted in capacity reduction. A few aircraft were redeployed to profitable international routes. The fact that many aircraft remained on the ground led to a hit of Rs 90 crore on the airline during the quarter, Jet Airways said.

The airline’s results include one-time exceptional items amounting to Rs 310 crore, primarily maintenance events, payroll arrears, reversal of duty credit and loss on exchange fluctuation.