Jet Airways slipped to Rs 10.40 billion net loss in fourth quarter FY 2018 on rising costs and sharp fall in other income. In the same period last year, the airline had made a net profit of Rs 5.83 billion.
The airline had posted the positive result for three preceding quarters, though its profit declined on lower other income in first nine months of the fiscal. Other income includes profit from sale and lease of aircraft and gains from real estate development.
On a standalone basis, other income on stand-alone basis fell 84 per cent to Rs 1.3 billion while overall expenses rose 25 per cent to Rs 70.91 billion in Q4 FY 18. Total revenue was up 8 per cent to Rs 61.96 billion.
This was Jet's first loss after eleven consecutive profitable quarters. The airline's auditors have made an observation regarding airline's ability to continue as a going concern following full-year loss and its negative net worth. The management, however, is confident that its cost-saving and revenue management initiatives will help it to raise substantial cash flows and address uncertainties.
The airline management blamed the weak Q4 result on rising fuel price, weakening rupee and one-time maintenance charges resulting in extra expenses of Rs 7.75 billion on a year on year basis. Expenses in all heads showed an increase except salary bill and lease rentals.
“Despite these challenges, in Q4 FY18 Jet Airways increased its capacity by over 10 per cent, increased passenger load factor by 3.9% points, reported a positive year-over-year passenger and cargo unit revenue, reduced net debt (excluding debt taken for Bandra Kurla complex property) by Rs 3.59 billion and achieved a year-over-year reduction in non-fuel unit costs of 1.1%,” the airline said in a statement.
|IndiGo||60.56||17.8 pc||1.17||-73.3 pc|
|Jet Airways||61.96||8.2 pc||-10.4|
|SpiceJet||20.9||24.9 pc||0.46||10.8 pc|
The airline said while over the last two years airfares have remained flat while fuel prices have doubled. Chief executive officer Vinay Dube said "Financial performance during the quarter was weaker due to the continuing increase in the price of fuel without a corresponding increase in air fares, as well as mark-to-market adjustments due to a weaker rupee.”
“The challenges notwithstanding, we are resolutely focused on undertaking numerous steps to create a healthier business by maintaining a relentless focus on lowering costs, increasing operational reliability as well as rejuvenating the customer experience, as part of our ongoing transformation,” he said.
The carrier is focused on reducing its sub-fleet complexity and adopt a host of measures including analytics to drive revenue growth in addition to leveraging the strength of its industry-leading JetPrivilege loyalty and rewards programme whose base expanded by more than 30% to nearly 8 million members during the year.