Jet Airways posts Rs 1,802 crore Q4 loss

Makes full impairment of its JetLite investment

Jet Airways posted a consolidated net loss of Rs 1,802 crore in the fourth quarter of the 2015 financial year due to an impairment charge of Rs 1,172 crore on account of reduction in the value of investment in subsidiary JetLite.

It had made a loss of Rs 2,465 crore in the corresponding period of the last financial year due to an impairment charge of Rs 700 crore.
 

While stand-alone revenue grew 11 per cent to Rs 5,064 crore and operating expenses benefited from the decline in aviation turbine fuel price, the airline made a loss of Rs 531 crore before other income, finance costs and exceptional items. This, however, was over 60 per cent lower than the loss it reported in the corresponding period of the last year.

Fuel expense on a stand-alone basis was lower 30 per cent at Rs 1,334 crore. Expenses on sales and distribution, lease rent and salaries were higher. Also, the airline made a provision of Rs 175 crore towards estimated penalties for delayed payment of tax deducted at source and the same was recorded in other expenses.

Jet (with JetLite) has a market share of 23 per cent and is the second-biggest domestic airline. It shut its no-frills Konnect brand in December. While the number of passengers flown rose 13 per cent, yields on a stand-alone basis were 2.6 per cent lower in the current quarter on a year-on-year basis.

In the notes to the profit and loss statement Jet Airways said the subsidiary company continues to incur losses and has a negative net worth. A detailed business plan of the subsidiary has been drawn and an independent external valuer has determined the enterprise value of subsidiary.

With the back to back two impairment charges the airline has completely written off its equity investment in JetLite. Over the last few years Jet Airways has invested Rs 3,608 crore in JetLite — Rs 1,645 crore equity and a Rs 1,963-crore interest-free loan given to the subsidiary. 

Cramer Ball, CEO, Jet Airways said “We have made significant progress on all key fronts of the business, and achieved substantial growth in all of our major key performance indicators in a turbulent and competitive business environment.”

“The roll-out of a consistent, single brand full service product across our domestic network was supported by our “Guest First” approach to customer service and hospitality, which is attracting new customers,” Ball said in a statement.

 “The airline recorded EBITDA of Rs 89 crore compared to negative Rs 470 crore in Q4 FY14,” he said.

Cargo’s strong growth continued in FY15, particularly on the domestic network which experienced an 11 percentage point increase in load factor. Jet Airways continues to focus on developing the booming e-commerce sector and enhancing its customer offering with the launch of Fast-Track, an airport-to-airport express product, the airline said.