Jet Airways Q1 profit more than doubles to Rs53.5 crore
Mumbai: Jet Airways (India) Ltd’s net profit more than doubled in the June quarter as healthy domestic growth offset muted earnings from its global operations. It was also bumped up by higher other income and gains on foreign exchange.
Profit rose to Rs53.5 crore in the three months to June from Rs25.88 crore a year ago.
Revenue at the airline run by Naresh Goyal increased 11.4% to Rs5,953.92 crore from Rs5341.26 crore last year.
A higher other income during the quarter that included income from the completion of a real estate development project and gains on account of foreign currency fluctuation, also boosted profits.
Total other income during the quarter increased to Rs305 crore from Rs202 crore a year ago.
The earnings, the company said in a statement, were also helped by a slight increase in domestic average fares, which advanced 3.4% during the quarter, reversing an otherwise declining trend witnessed in the last few quarters.
“Jet Airways took several focused measures to revitalize its business and realize greater efficiencies in spite of weakening international demand, especially from the Gulf,” chairman Goyal said in a statement.
Jet Airways’ listed rivals InterGlobe Aviation Ltd-run IndiGo and SpiceJet Ltd also reported encouraging fiscal first-quarter results.
IndiGo reported a 37% increase in net profit to Rs811.14 crore in the three months to June—the highest quarterly profit posted by an Indian airline. The profit was notched up on a 25.6% increase in revenue to Rs5,752.91 crore.
Jet Airways’s earnings missed net profit estimates. A Bloomberg poll of three analysts had estimated a net profit of Rs69.47 crore.
“Had it not been for the higher other income, the earnings would have been depressed like the previous quarters,” said an analyst at a domestic brokerage, declining to be identified. He said unlike its peers, Jet has not been able to take much advantage of the increase in air fares, and the gains have been eroded by higher costs.
The airline’s total expenses during the quarter rose to Rs5,843.8 crore from Rs5,234.4 crore a year ago.
Goyal said low fares, together with the addition of capacity in the domestic market, put pressure on yields. The airline he added, had taken steps to strengthen its key performance indicators, including increasing its domestic footprint by enhancing connectivity and choice of flights for passengers.
Traffic for Jet in the Indian market rose 20%, resulting in a 9.2% year-on-year increase in domestic revenue from a year ago to Rs5,648.87 crore, including passenger fares, cargo and excess baggage.
“On the international side, the Gulf situation notwithstanding, our synergies with our strategic and equity partner Etihad Airways, continue to grow on a healthy trajectory. Our partnership continues to deliver incremental value to both partners not only from strategic and operational perspectives, but also in commercial terms,” said Goyal.
Jet’s shares rose 1.7% to Rs581.80 on BSE. The benchmark Sensex closed at 32,158.66 points, up 0.87%. The earnings were announced after the close of trading.