Jet swings to profit ahead of Etihad deal

Last Updated: Sat, Feb 02, 2013 04:22 hrs

Higher revenue and an improvement in yields, coupled with reduced operating expenses, has helped Jet Airways return to profit. For the quarter ended December, the airline reported a consolidated net profit of Rs 93 crore, against a loss of Rs 122 crore in the year-ago period.

Revenue rose 6.6 per cent to Rs 4,251 crore and earnings before interest, tax, depreciation, amortisation and lease rentals rose 28 per cent, as the airline scaled down capacity and cut costs. Expenditure fell 7.5 per cent, largely due to a decline in employee, fuel and sale & distribution costs.

During the quarter, the airline cut capacity nine per cent. The number of passengers fell 10.7 per cent compared to the previous quarter. Loads, too, were lower. The airline reported 22 per cent growth in yields in its operations. On a standalone basis, international operations accounted for 56 per cent of the airline’s revenue.

The capacity of JetLite (re-branded Jet Konnect) fell 21 per cent. Its revenue fell 2.7 per cent. However, it recorded a profit of Rs 8.1 crore, owing to 30 per cent growth in yields.

“Improvement in yields and decrease in unit costs helped improve operating margins during the quarter. This is despite a slowdown in traffic growth, higher fuel prices and the impact of a weak rupee against the dollar. The unrealised exchange loss for the quarter was about Rs 48 crore,” the airline said.

Through the last few months, the airline discontinued loss-making services to Johannesburg, New York and Milan.

“This resulted in instances of aircraft on the ground in the short term, the impact of which was about Rs 55 crore during the quarter,” it said.

“All our efforts on revenue, costs and network have resulted in turning around the airline operations. This is despite higher fuel prices and the impact of rupee depreciation,” chief executive Nikos Kardassis said in a statement.

“In domestic operations, the airline made a profit of just Rs 10 crore. This is despite the fact that the third quarter is the peak travel season. The airline carried out sale and leaseback of seven planes, and this was reflected in an increase in lease costs. However, on a consolidated basis, its interest costs, too, have increased,” said an analyst.

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