Jet Airways makes profit for the first time since Dec 2012

Consolidated profit of Rs 3 crore on reduction of fuel bill

Jet Airways returned to profitability during the quarter ended December 2014, posting a modest net profit of Rs 3 crore, owing to growth in revenue and an 11 per cent cut in fuel expenses. On a consolidated basis, this was the airline’s first quarterly profit since December 2012. Its earnings were aided by Rs 69-crore exceptional gains in form of receivables from lessors.

While the airline recorded a standalone profit of Rs 63 crore, against a loss of Rs 263 crore in the December quarter of 2013, subsidiary JetLite posted a Rs 60-crore loss, against a loss of Rs 16 crore in the year-ago period.

Jet’s earnings were below the estimate of the Centre for Asia Pacific Aviation (Capa), which had predicted a profit of Rs 120-180 crore.

Total revenue grew nine per cent to Rs 5,436 crore (against Rs 4,990 crore a year earlier). The airline recorded 10 per cent more passengers than in the third quarter of FY14.

Though overall expenses grew 5.1 per cent, a lower fuel bill and a 1.7 per cent fall in interest costs helped earnings. Between October and December last year, jet fuel prices fell 11 per cent.

Chief executive Cramer Ball said, “At the beginning of FY15, we outlined a three-year turnaround plan to get Jet Airways back to profitability. Today, our business performance provides hard evidence that we are turning the business around and are on track to achieve our targets. While the global and local operating conditions have eased, we only expect to see the real impact of the lower fuel price in the next quarter.”

The airline said its combined load factor rose 5.2 per cent to 82.1. The improvement was due to network optimisation, synergies with partner carriers, implementation of a consistent, full-service and single-brand strategy across domestic operations, and increased focus on premium traffic, it added.

Kapil Kaul of CAPA said the result was disappointing given that the operating environment was significantly favourable in Q3. "Jet turnaround is critically dependent on domestic operations which continue to face challenge. However overall service improvements are becoming visible.''