Jet Airways flies back into black
Jet Airways, which is close to making equity deal with Etihad Airways, on Friday reported net profit of Rs 85 crore for the quarter ended December 31, 2013 from an earlier loss of Rs 101 crore in the same quarter last fiscal.
Its revenues grew nearly 7 per cent, which is lower than expected, to Rs 4,205.8 crore from Rs 3,939.2 crore on year-on-year (YoY) basis. Average Gross Revenue per Passenger (Yield) was up 18.6 per cent during the quarter.
Aviation experts aver that the company's flying back to profit-lane was due to some deft move like buying more jet fuel directly from overseas suppliers and other cost cuts, which helped improve yields despite slowdown in traffic growth.
Jet Airways CEO Nikos Kardassis said the airline took all measures to boost earnings and cut costs, while at the same time strived to enhance ancillary revenues to boost overall performance. “All of our efforts on revenues, costs and network side have resulted in turning around the airline operations. This is despite higher fuel prices and rupee depreciation impact that we have had in the last few months. The combined impact of higher yields and lower costs (ex fuel) have resulted in significantly lowering the breakeven seat factor levels in the business,” he said.
Consequently, Jet Airways gross yields per passenger grew 18.6 per cent and aviation fuel cost fell 3 per cent to Rs 1688 crore on year-on-year (YoY) basis. This is despite slowdown in traffic growth, higher fuel prices and impact of a weak rupee as against US dollar.
During the quarter under review, Jet Air suffered a foreign exchange loss of Rs 48 crore as against the gain of Rs 179 crore in the same quarter last fiscal as the rupee remained weak against the dollar.
Also, the company said that it has stopped capacity on loss making routes and will re-deploy aircraft on profitable high density routes in ensuing months. Currently, aircraft on ground have impacted topline by Rs 55 crore.
Further, the company CEO said, high aviation fuel cost and currency fluctuation remain a cause of concern for the sector. However, giving an outlook for Q4, he said passenger bookings are healthy but there could be some seasonality impact.