Jet posts R123-crore loss on fuel costs

Jet Airways, India?s biggest airline by market share, on Friday reported a net loss of R123.16 crore for the quarter ended June 30, 2011, compared with a net profit of R3.52 crore in same quarter of the previous year, as high fuel costs and competitive pricing offset gains from a rise in passenger traffic. Revenues for the quarter under review were up 20% at R3,320.93 crore from R2,746.98 crore in the June 2010 quarter. The results include performance of JetLite and JetKonnect also.

?In May and June 2011, pricing in the market was impacted due to two big carriers dropping fares below costs which eventually led to lower market fares,? said the company in a statement. ?Q1FY12 also saw a steep increase in fuel prices (over Q1 FY11), which consumed all of the increases in revenues during the quarter. It was due to our stringent cost-saving measures and regular tactical route rationalisation initiatives that Jet Airways posted operating profits (Ebitdar) of R328.6 crore for the quarter,? it added.

The domestic operating environment continued to be challenging in Q1, largely due to competitive pricing activities. Airlines had, in April 2011, looked at increasing yields by not discounting but the same resulted in muted demand and low seat factors.

The Jet Group continues to maintain its leadership position in the Indian aviation industry with the highest market share of 25.5 % for the first quarter ending June 2011, it said.

Jet Airways, on a standalone basis, registered an Ebitdar of R3,12 crore in June quarter of the financial year 2011-12. It recorded an Ebitdar margin at 9.3% in Q1 FY12 versus 20.4% in Q1 FY11. For Jetlite, Ebitdar stood at of R16.6 crore in Q1 FY12 versus Ebitdar of R99 crore in Q1 FY11.

Jet Airways shares on the BSE closed at R499.05, up 2.36% on Friday.

?The near term poses some challenge in terms of crude oil prices but I am sure, we will come out of this as a much stronger and smarter airline,? said Nikos Kardassis, CEO, Jet Airways.

International operations accounted for 57% of total revenues at R2036.2 crore. ?We achieved seat factor of 80.5% in Q1FY12 versus 80.1% in Q1FY11,? said the company. The Ebitdar margins for the international business stood at 11.2% in Q1FY12.

For the quarter, international traffic grew by 19.6% for the quarter vs. same period last year.

The company did not rule out the possibility that if international crude oil prices continued to be in the $100 per barrel levels, it will impact second quarter numbers.

?For the domestic business, we expect muted growth in capacity over the next few months while demand continues to grow at around 15%. Pricing activities by competition continue and this will put pressure on yields in what already is the weakest quarter of the year,? it said.

Jet Airways currently operates a fleet of 97 aircraft, which includes 10 Boeing 777-300 ER aircraft, 12 Airbus A330-200 aircraft, 55 next generation Boeing 737-700/800/900 aircraft and 20 modern ATR 72-500 turboprop aircraft, with an average fleet age of 5.45 years.