Jet Airways sees fifth successive profitable quarter in June

The airline has benefit from lower fuel prices, higher traffic and increased aircraft utilisation

Jet Airways has reported a fifth consecutive profitable quarter in a row, benefiting from lower fuel prices, higher traffic and increased aircraft utilisation. However, its margins came under pressure in a competitive pricing scenario.

The profit was Rs 103.1 crore in the three months ended June, compared with Rs 221.7 crore in the same period a year before.

However, the former figure included an exceptional item, on account of receivables from lessors. Pricing pressure had an impact on revenue, which fell to Rs 5,112 crore, down 20 per cent from the Rs 5,220 crore in the corresponding period last year.

However, the fall in price of jet fuel enabled a decrease in fuel expenses by 19 per cent to Rs 1,156 crore as compared to Rs 1,445 crore fall in the previous year. Overall expenditure fell 1.2 per cent to Rs 4,994 crore  “Jet has strengthened its core operations and achieved better capacity utilisation and greater efficiency. We have been able to report lower non-fuel cost in spite of inflationary increases and weakening of the rupee against the dollar by almost six per cent,” said Naresh Goyal, chairman.

Aircraft capacity grew 3.8 per cent and passenger traffic 4.4 per cent.

Chief Executive Officer Amit Agarwal in an earnings call said the capacity would increase on the international front with six B-777 joining the fleet from Etihad in this financial year.

“Due to the intense competitive environment, industry yields were under pressure and the trend is expected to continue in (the next quarter),” said Goyal. This was visible from a decrease in domestic segment revenue by 4.2 per cent, to Rs 2,105 crore from the earlier Rs 2,198 crore.

It was better on the international front with growth of 13 per cent, from 487,921 passengers to 551,859 in the quarter. Code share traffic with strategic alliance partner Etihad Airways and its partner airlines grew 38 per cent. Agarwal added overall fares were down by 10 per cent this quarter due to increased capacity. Market leader IndiGo had earlier reported a decline in profit by 7.3 percent due to lower yields.