Reeling from the impact of fewer passengers on domestic and international routes as a result of the global economic slowdown, India?s largest private carrier Jet Airways, saw losses swell 135% to Rs 214.18 crore for the third quarter ended December 31, 2008, compared with Rs 91.12 crore in the corresponding quarter last year.
However, a drop in the price of aviation turbine fuel in October 2008 cushioned the impact. ATF prices fell to $39 a barrel that month from a high of $147 in FY08 as crude prices softened in the international market.
Jet?s sales for Q3 grew 21.7% to Rs 3,063.07 crore, against Rs 2,517.18 crore. The company, which had to roll back its decision to sack 2,000 staff owing to pressure from several quarters in September, said employee remuneration rose by Rs 60 crore in Q3 compared with the previous year.
For the nine-month period ended December 31, the airline posted a net loss of Rs 455.30 crore, against Rs 31.90 crore the previous year. Sales grew 36.5% to Rs 92,207 crore. Shares of the company rose 1.26% to close at Rs 157.05 at the BSE on Friday. The results were announced after market hours.
Jet?s results do not reflect the much-touted operational efficiencies from its alliance with rival Kingfisher Airlines, signed in October. Says Jet CEO Wolfgang Prock-Schaeur: ?The operational efficiencies in any kind of alliance like the one with Kingfisher cannot be ascertained immediately. We will see better financials on account of the alliance in the ensuing quarter. The alliance is very much on track.? He added that pressure on corporates and the general recessionary impact on leisure traffic had led to an 18% decline in the overall market in the third quarter.
KG Vishwanath, general manager, MIS & investor relations, said, ?We leased out five aircraft during the quarter and we intend to phase out three Boeing 737 aircraft whose leases expire in the fourth quarter.? He added that the company gained around $10 million due to a depreciation of the rupee against the dollar during the quarter.
However, other factors that weakened the financials include an increase in employee remuneration and benefits at Rs 364.87 crore, compared with Rs 302.70 crore in the corresponding quarter of the previous financial year.
Aircraft lease rentals have also gone up to Rs 193.05 crore, compared with Rs 136.46 crore. Aircraft fuel expenses surged to Rs 1,084.03 crore, compared with Rs 917.31 crore.
Mihir Shah, an analyst with Prabhudas Lilladher feels though the airline posted losses, it is comparatively lower than the previous two quarters due to a fall in fuel costs. ?The Ebitda margin is at 6.4% since the fare cuts have been in line with consumer spending in times of financial crisis worldwide.? An industry observer adds that the outlook for the ensuing quarter remains moderate. ?The sector may not post profits, but won?t see huge losses either in the fourth quarter,? he said.