Jet Airways reports record quarterly loss of Rs 2,154 cr

Written by fe Bureau | Mumbai | Updated: May 28 2014, 10:02am hrs
Jet Airways on Tuesday posted a record loss of R2,154 crore in the March quarter compared to R496 crore in the same period of the previous year. This includes an impairment of R700 crore on account of continuing losses and erosion of net worth in its subsidiary JetLite. The management has performed a sensitivity analysis on the values so arrived and concluded that provision for diminution/impairment of R700 crore will fairly reflect the recovery amount based on prudent assessment, a company statement said.

Total income from operations during the period rose 16.43% to R4,566.17 crore compared to a year ago, on the back of R368 crore it earned by leasing aircraft and engine.

The results fared worse than the Bloomberg estimates which pegged Jet to post a net loss of about R150 crore on the back of sales of R4,864 crore.

Total costs increased 28.78% to R5,932.21 crore year-on-year on the back of an increase in fuel expense, which stood 15.2% higher at R1906.39 crore.

The airline's consolidated losses widened to R4,129.76 crore for FY14 from R779.78 crore in the previous year. Its total income from operations remained flat at R19,035.84 crore during FY14.

Aviation consultancy firm Centre for Asia Pacific Aviation (CAPA) had earlier said that three Indian carriers Air India, Jet Airways and SpiceJet were expected to post combined losses in excess of $1.2 billion during FY14, a figure that could rise higher due to the roll out of various promotional pricing schemes by airlines during the March quarter.

"When the industry is reporting significant losses in peak season, it is clear that the domestic Indian aviation market has a fundamental problem with viability, the CAPA report had said.

CAPA further added that almost all of the $379 million equity infusion by Etihad in Jet Airways is expected to be wiped out by the FY14 losses.

Etihad Airways had last

November concluded the stake sale deal with Jet Airways,

giving the Abu Dhabi airline 24% equity worth R2,060 crore or $ 379 million in the Indian

airline.

On Tuesday, shares of Jet Airways closed at R268.15 on the Bombay Stock Exchange (BSE), down 3.53% from the previous day's close.