Jet Airways on Wednesday reported its biggest ever quarterly consolidated net loss of R998.5 crore in the three months to September as the carrier aggressively discounted prices in a weak quarter and a depreciating rupee pushed up aviation fuel costs.
The airline has in the first half of FY14 already used up 60% of the funds forthcoming from the equity investment by the Abu Dhabi-based Etihad Airways, analysts pointed out. Etihad will invest R2,060 crore in Jet Airways in return for a 24% stake in the company in a deal expected to be concluded in a week.
In the same quarter last year, the airline had posted a consolidated net loss of R166 crore. As of September 30, the airline had accumulated losses of R4,802.62 crore since it listed in March 2005. The airline’s market cap has crashed to R2,990.61 crore as on October 23, 2013, from R11,259.68 crore when it listed. The company’s equity capital as of March 31, 2013, was R86.33 crore, while the reserves and surplus were a negative R4,28.86 crore.
Consolidated operating revenues for the airline during the quarter were up 1% at R4,607.9 crore from R4,563 crore in the same quarter last year. The airline blamed the lean season, the economic slowdown and the weakening currency that pushed up fuel prices as the main causes for the losses.
“The Indian aviation industry witnessed increasing cost challenges, mainly due to rupee depreciation against the US dollar, high fuel prices and increase in airport charges in certain stations putting pressures on the bottom line,” said Jet Airways CEO Gary Toomey.
“In the current scenario, Jet Airways has managed to remain competitive through a series of planned steps, such as discontinuing loss-making routes and stringent cost control measures. The ongoing initiatives will augur well for the airline’s performance in the quarters to come.”
But even as the Jet management points fingers to factors out of its control that ultimately led to the losses, the airline’s heavy discounting during August-September to increase load factors proved costly. According to a statement from Jet Airways, average passenger yields decreased 11% to Rs