New Delhi: Record high aviation fuel prices, heavy spending on overseas operations and a year-old acquisition that continues to lose money dragged Jet Airways (India) Ltd, which operates India’s largest airline group by passengers flown, to its biggest quarterly loss since it went public three years ago
The company lost Rs221.18 crore in the January-March quarter—equivalent to some Rs2.5 crore a day. The loss in the fourth quarter of fiscal 2008 compares with a net profit of Rs88.01 crore it had reported in the year-ago period.
Revenues in the quarter gone by reached Rs2,727.02 crore—pulled down, in part, by foreign exchange losses of some Rs110 crore—up 37% from Rs1,989.03 crore a year ago. Full fiscal 2008 losses for the airline added up to Rs253.06 crore on total income of Rs9,481.51 crore, compared with a profit of Rs27.94 crore on sales of Rs7,401.31 crore in the year before.
Consolidated with the operations of its low-fare unit JetLite (India) Ltd, which before acquisition last year was known as Sahara Airlines Ltd, losses reached Rs653.87 crore on revenues of Rs10,921.27 crore for the year. Consolidated numbers were not released for the last quarter.
At the level of earnings before interest, tax, depreciation and amortization, Jet Airways had a profit of Rs80.16 crore in the March quarter. But the operating losses at JetLite stood at Rs145.7 crore.
A Mumbai-based analyst with an international brokerage said the results were in line with expectations, but the airline’s decision to revalue its assets Rs2,700 crore upwards was surprising.
He predicted the worst was still to come. “The problem of high oil prices started coming in the first quarter (this fiscal year). Losses in the first quarter would be much much higher. They can’t really do much about the oil, as an individual player,” the analyst added, asking not to be named as he is not authorized to speak with the media.
Aviation fuel prices, which have tripled in the last three years, have risen 47% from end-March.
Jet Airways chairman Naresh Goyal told an all-airline meeting in the Capital this month that his company was losing as much as Rs9 crore a day, or more than three times what it lost in the March quarter. This fiscal year the airline industry is expected to report nearly double its estimated loss of Rs4,000 crore in 2007-08.
“The next few quarters are expected to be impacted negatively by very high fuel prices as we have seen in the months of April, May and June,” the company said in a statement, adding: “Overall we expect the next few quarters to be very challenging.”
Jet Airways’ 520 flights a day includes operations to 17 international cities, most of which were added in the last fiscal. Shares of Jet Airways closed at Rs521.45, up 0.54%, on Tuesday on the Bombay Stock Exchange.