Jet Airways swings back to profit, net at Rs.85 crore

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SummaryNaresh Goyal-owned Jet Airways swung back to profit during the October-December quarter with a net profit of R85 crore on better yields and changes in the network.

Naresh Goyal-owned Jet Airways (India) swung back to profit during the October-December quarter with a net profit of R85 crore on better yields and changes in the network. The return to profit comes ahead of a potential stake sale deal with Etihad Airways of Abu Dhabi. In the same quarter last year Jet had a net loss of R101.22 crore while in the preceding quarter the airline had net loss of R99.67 crore.

During the quarter, Jet’s net sales rose 6.6% to R3,941.39 crore from R3,696.26 crore in the same quarter last year.

Apart from better yields, some key changes in the network, including the dropping of some unprofitable routes, helped the airline reduce its fuel costs. Year-on-year fuel costs came down 3.6% to R1,688.53 crore from R1,753.34 crore in the same quarter a year ago. Fuel cost as a percentage of net sales stood at around 43% for the third quarter and in the same quarter last year it stood at 47%.

“All of our efforts on revenues, costs and network side have resulted in turning around the airline’s operations,” said Nikos Kardassis, CEO, Jet Airways (India). “The combined impact of higher yields and lower costs have resulted in significantly lowering the breakeven seat factor levels in the business.” Jet, however, did not comment on the possible stake sale deal with Etihad Airways of Abu Dhabi. It was expected to sign the term sheet on Friday but last minute negotiations over the valuation of Jet’s shares delayed the deal. Sources maintained that the deal should be completed in the next few days.

The airline achieved an average seat factor of 76.1% while yields or gross revenue per passenger was up 18.6%.

Operationally, the carrier managed to earn a profit on every seat. Revenue per available seat kilometer (ASKM) or the revenue earned on each seat per kilometre stood at R4.63 while the cost per ASKM or the cost for providing each seat stood at R4.26. In essence, before taxes and exceptional items, the airline was making a profit of R0.37 per seat per kilometer, bettering it from R0.08 in the preceding quarter.

“Improving yields and decrease in the cost per ASKM excluding fuel has helped to improve operating margins for the quarter,” the airline said in a statement. On Friday, Jet’s share closed almost flat at R622.65.

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