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Airline firms’ Q3 show may bring some cheer

Airline firms’ Q3 show may bring some cheer
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First Published: Thu, Jan 15 2009. 10 31 PM IST
Updated: Thu, Jan 15 2009. 10 31 PM IST
New Delhi / Mumbai: The country’s three listed airline firms, Jet Airways (India) Ltd, Kingfisher Airlines Ltd and SpiceJet Ltd, which serve two of three passengers who fly to domestic destinations, are expected to announce better results for the December quarter compared with the preceding quarter, analysts say.
Reeling under the twin impact of fewer passengers and high jet fuel prices, most airlines had posted huge losses in the September quarter. Jet Airways lost Rs384.53 crore, Kingfisher Airlines Rs483.25 crore and SpiceJet, Rs198 crore.
For the third quarter, considered as the strongest for the airlines as demand swells and more people travel during the festival season, analysts say that the firms are likely to report better earnings.
Mihir M. Shah, an analyst with Mumbai-based brokerage Prabhudas Lilladher Pvt. Ltd, writes that the correction in crude oil prices, which now seem to have stabilized at $35-40 per barrel, has solved one part of the problem for the domestic airline firms. Further, though the air traffic outlook continues to be bleak, airline firms have been rationalizing capacities by phasing out or sub-leasing aircraft.
“This, along with fare cuts, should improve load factors (or the number of passengers on a plane; this is currently closer to break-even) for the coming fiscal,” Shah notes.
Prabhudas Lilladher estimates Jet Airways’ revenues for the quarter gone by at Rs2,561.2 crore, 5.6% more than the year-ago period and a net loss of Rs242.2 crore, which will be higher than the Rs91.1 crore loss in the third quarter of the last fiscal.
The brokerage does not track other aviation stocks.
Airline consultancy Centre for Asia Pacific Aviation’s (Capa) India CEO Kapil Kaul predicted losses for Jet Airways to be Rs300-350 crore, including that of its low fare subsidiary JetLite Ltd which is likely to account for Rs100-150 crore.
Jet Airways reports financial results on Friday.
Low-fare carriers such as SpiceJet are likely to fare better especially because the airline has expanded operations in the December quarter, potentially increasing revenue. SpiceJet CEO Sanjay Aggarwal told Mint on 2 December that the airline was likely to book a small profit for that month and has also decided not to return three aircraft. SpiceJet, which operates 115 flights a day with its 19-plane fleet, has not announced the result date yet.
Kaul said he expects SpiceJet to reduce its losses from Rs198 crore in the September quarter to about Rs60 crore in the three months to 31 December.
Kingfisher Airlines, which will announce results on 31 January, according to a company spokesman, is also likely to fare better than its second quarter loss of Rs483.25 crore, according to Capa, which did not specify an estimate.
On Thursday, shares of SpiceJet on the Bombay Stock Exchange closed at Rs13.60 each, down 2.51%, while those of Kingfisher ended 3.39% weaker at Rs34.25. Jet Airways was up 0.88% to end at Rs155.10. The benchmark index of the bourse shrunk 3.45%.
tarun.s@livemint.com
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First Published: Thu, Jan 15 2009. 10 31 PM IST