Jet may post Rs2,000cr loss in two years

Jet may post Rs2,000cr loss in two years
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First Published: Thu, Jun 26 2008. 11 17 PM IST

Fuel-price woes: Jet Airways chairman Naresh Goyal. Citigroup analysts cut the target price of Jet shares by 42% to Rs440. (Photo: Ramesh Pathania/Mint)
Fuel-price woes: Jet Airways chairman Naresh Goyal. Citigroup analysts cut the target price of Jet shares by 42% to Rs440. (Photo: Ramesh Pathania/Mint)
Updated: Thu, Jun 26 2008. 11 17 PM IST
Mumbai: The nation’s biggest domestic carrier, Jet Airways (India) Ltd, may post a loss in the next two years because of a surge in fuel prices, Citigroup Inc. said, reversing an earlier estimate.
The airline and its budget-carrier unit, Jet Lite (India) Ltd, which was acquired by Jet Airways in April 2007, may post a combined loss of Rs2,000 crore ($468 million) in the next two fiscal years, Citigroup’s Mumbai-based analyst Jamshed Dadabhoy said in a note to clients on Thursday.
Fuel-price woes: Jet Airways chairman Naresh Goyal. Citigroup analysts cut the target price of Jet shares by 42% to Rs440. (Photo: Ramesh Pathania/Mint)
The analyst’s previous forecast was for a loss in the current year and a profit in the next year. The combined forecast excludes currency gains or losses and profit from any sale and leaseback of planes.
The bank had earlier expected the carrier to post a loss of Rs280 crore in the fiscal year ending 31 March, and a profit of Rs490 crore in the year ending March 2010.
Jet Airways, controlled by billionaire Naresh Goyal, had its first loss in five years for the year ended 31 March after spending on jet fuel, also known as aviation turbine fuel, almost doubled.
Airlines in India may double their combined losses to $1.5 billion this year on fuel and discounted tickets, the Centre for Asia Pacific Aviation, or Capa, an industry consultant, predicted this month.
Jet fuel, the biggest expense for most Asian airlines, has almost doubled in Singapore trading this year.
That has prompted Indian oil refiners to increase prices for local airlines, which aren’t allowed to hedge in the local market.
The Mumbai-based carrier had a fiscal fourth-quarter loss of Rs221 crore, its biggest quarterly loss in at least three years, compared with a net income of Rs88.01 crore a year earlier.
Jet Airways fell 4.79% to close at Rs517.90 in Mumbai trading on Thursday. The airline has declined 47% so far this year compared with a 29% plunge for the benchmark Sensex index.
Dadabhoy cut the target price for Jet Airways shares by 42% to Rs440. Bloomberg
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First Published: Thu, Jun 26 2008. 11 17 PM IST