Jet Airways posted its first profits after six straight quarters of losses. Boosted by a Rs 305 crore earnings from a slump sale of its frequent flyer programme to stake partner Etihad, the Mumbai-based carrier recorded net profits of Rs 70 crore for the quarter ending September 30, 2014.
In the corresponding quarter last year, the airline had recorded a net loss of Rs 891 crore – the last time it posted profits was in the quarter ending December 21, 2013 (Rs 85 crore). Total income in the quarter under review rose 14% to Rs 4,772.25 crore.
However, losses in the quarter (before exceptional items) have also come down on the back of restructuring activities like cutting loss-making domestic routes to Rs 235 crore, from Rs 833 crore in the same period last year. “Total passenger revenue up 13.9% to Rs 4,277 crores in Q2 FY15 versus Rs 3,753 crores in Q2 FY14. Cargo revenue up 10.5% to Rs 379 crores in Q2 FY15 versus Rs 343 crores in Q2 FY14,” the company said.
The loss-making carrier, which has a total debt of Rs 9,800 crore (as of June 30, 2014), has been looking to raise $150 million from overseas at a lower cost. However, rating agency ICRA this August downgraded the company’s loan rating to ‘D’ owing to delays in payments. A ‘D’ rating indicated possibilities of default.
Cramer Ball, newly appointed CEO of Jet Airways said, “This is in keeping with our three-year turnaround plan. The operational restructuring initiatives with route and network rationalisation are already yielding dividends on the domestic and international network. The organic network expansion, coupled with enhanced global connectivity through alliances and codeshares, has also helped increase international passenger traffic.”
Jet, which hopes to return to profitability by FY17, had sold 24% stake to Abu Dhabi based Etihad last year for over Rs 2,000 crore. The airline now aims to stop operations of its low-cost arm JetLite by December in order to focus on its full-service operations and compete with Air India and new entrant Vistara.
The Jet Airways scrip at the BSE closed 3.01% up to Rs 251.45 on Friday. Airline stocks have fared well over the past few weeks on the back of sharp cut on jet fuel prices over the past month.