Mumbai: India’s largest private-sector airline, Jet Airways, forecast on Tuesday that business conditions will remain “challenging” due to recession after reporting it had swung to a fourth-quarter profit.
Jet announced on Monday a net profit of Rs529.9 million ($11.04 million) in the three months to March, helped by cost-cutting and lower fuel prices, after posting a Rs2.21 billion loss in the same period last year.
“We expect the year ahead to be challenging in terms of continued sluggish demand for air traffic on local and international routes,” Jet Airways said in a statement issued on Tuesday.
“The global recession will continue to impact corporate travel as earnings slow down,” the statement said. “With the upcoming lean (monsoon) season, load factors and yields will continue to be under severe pressure,” it added.
Jet shares were down Rs14.5 or 4.64% at 291.1 in early afternoon trade on the Mumbai stock exchange.
For the full year ending March, the carrier announced its net loss had widened to Rs4.02 billion from a net loss of Rs2.53 billion the previous year.
To lower costs, Jet has leased out long-haul aircraft and pared international and local routes. Jet, which runs budget carrier Jet Lite, earlier this month introduced another no-frills airline, Jet Airways Konnect, to boost passenger traffic.
“The company is adapting to new market realities and intends to capture price sensitive markets,” the airline said in Tuesday’s statement.
The number of domestic flyers in India dropped 15% in April from a year earlier, according to civil aviation figures.
Sector losses for the fiscal year ending in March 2009 are estimated to have nearly doubled from the previous 12-month period to $1.75 billion, Kapil Kaul, India head of the consultancy Centre for Asia Pacific Aviation said recently.