Mumbai: The country’s second largest airline by passenger carried, Jet Airways (India) Ltd, posted a stand-alone net profit of Rs52.99 crore for the quarter ended 31 March, helped by new rules for claiming depreciation benefits and receipt of central value-added tax credit, or Cenvat.
Income from leasing out at least nine aircraft also helped the carrier turn around from a net loss of Rs221.18 crore for the year-ago quarter on a stand-alone basis. Revenue, excluding leasing income, slipped by 15.77% to Rs2,263.37 crore in the period.
The earnings on a stand-alone basis do not take into account the results of its low-cost subsidiary JetLite.
Little respite: A Jet Airways aircraft. Jet’s revenue, excluding leasing income, declined 15.77% to Rs2,263.37 crore in the March quarter. Ramesh Pathania / Mint
A change in depreciation rules helped Jet Airways make a profit of Rs20.59 crore for the quarter. Income from leasing planes for the quarter was Rs202.28 crore, against Rs72.57 crore in the last quarter of fiscal 2008. The carrier also secured a Cenvat credit of Rs349.93 crore for the three months.
For the year ended March, the stand-alone net loss for Jet Airways was Rs402.34 crore against Rs253.06 crore in the previous year. Revenue in the fiscal rose by 27.84% to Rs11,083.43 crore from Rs8,669.28 crore.
“If we deduct the company’s income from leasing aircraft and other benefits on account of depreciation and Cenvat, Jet Airways would have posted a stand-alone Rs178 crore net loss for the March quarter. The stand-alone loss for the year would have been Rs1,250 crore,” said an analyst who tracks Jet Airways for an international brokerage.
Still, the operating profit of Jet Airways is positive, he said. “It would have posted a small profit had it stayed away from JetLite acquisition.” Jet Airways acquired Air Sahara from Sahara group for Rs1,540 crore and rebranded it as JetLite (India) Ltd.
The airline posted a consolidated net loss of Rs961.41 crore for 2008-09, 47.03% higher than the Rs653.87 crore net loss it posted in 2007-08. Almost two-thirds of it was on account of JetLite’s Rs630.50 crore net loss in 2009.
“Though you may not see Jet Airways returning to profits immediately, it may fly back to profits by early FY11,” said the analyst, who didn’t want to be named because he is not authorized to speak to the media.
Mahantesh Sabarad, an analyst at Centrum Broking Pvt. Ltd, said the operating profit of Jet Airways shows a turnaround in the works.
Indeed, the operating margin of Jet Airways has risen to 20.8% from 7.7%.
The carrier posted a Rs514 crore operating profit in the reporting quarter against Rs21.2 crore a year earlier, but the company itself does not see any sign of a turnaround as yet.
“...the downward trend in domestic aviation market continued. With the upcoming lean season, load factors and yields will continue to be under severe pressure,” the carrier said in a media statement.
“The global economic environment, coupled with economic realities of the airline industry in India requires exceptional efforts to return to break-even and profitability. We expect the year ahead to be challenging in terms of continued sluggish demand for both domestic and international operations. This is more so on premium segments, thus putting pressure on overall yields,” the statement added.
On Monday, Jet Airways shares rose marginally by 0.64% to Rs305.25 on the Bombay Stock Exchange even as the benchmark Sensex rose 0.19% to 13913.22.