Jet Airways Q1 profit slumps 53.5% to Rs103 crore
Mumbai: Jet Airways (India) Ltd, the country’s second-largest airline by passengers carried, reported a 53.47% decline in net profit for the June quarter, hit by higher operating expenses and lower sales.
The airline’s net profit dropped to Rs103.14 crore in the three months ended 30 June from Rs221.70 crore in the year-ago quarter. Net sales fell by 2.07% to Rs5,112.02 crore from Rs5,220.11 crore a year ago.
Despite the drop, it was the fifth straight quarterly profit for Jet Airways, in which Etihad Airways PJSC has a 24% stake. The airline had been expected to post a net profit of Rs269.80 crore on net sales of Rs5,177.90 crore, according to a survey of analysts by Bloomberg.
The April-June quarter is peak travel season in India as schools and universities close for holidays. The June to mid-October period is the lean season for airlines.
Shares of Jet Airways lost 1.01% to close at Rs541.45 per share on Friday on the BSE while the benchmark Sensex gained 1.05% to close at 28152.40 points.
Rival InterGlobe Aviation Ltd, owner of India’s biggest low-cost airline IndiGo, last week said net profit in the June quarter fell 7.3% from a year ago on cheaper fares and higher expenditure. Net profit during the period dropped to Rs591.77 crore from Rs638.89 crore a year ago.
Jet Airways said its operating profit increased by 124% to Rs219 crore in the June quarter. Ebitdar (earnings before interest, tax, depreciation, amortization and rentals) rose to Rs1,251 crore from Rs1,082 crore a year ago.
The total cost per available seat kilometre (CASK), a key metric of operating efficiency, fell by 7.1% to Rs4.19 against Rs4.51. CASK excluding jet fuel fell by 1.2% to Rs3.20 from Rs3.24.
“Jet Airways’ results are a tad disappointing due to lower than expected revenues on domestic routes,” said Mahantesh Sabarad, deputy vice-president (research-equities) at SBICap Securities Ltd. “However, the CASK appears to be well under control.”
Jet Airways chairman Naresh Goyal said the airline had strengthened its core operations and achieved better capacity utilization and greater efficiency. “We have been able to report lower non-fuel cost in spite of inflationary increases and weakening of Indian rupee against the US dollar by almost 6%. Due to the intense competitive environment, industry yields were under pressure in Q1 and the trend is expected to continue in Q2,” Goyal said.
“Our strategic partnership with Etihad Airways continues to strengthen. In Q1, code-share traffic delivered by Etihad Airways and other Etihad Airways partner airlines to Jet Airways grew by 41%,” Goyal said.
James Hogan, vice-chairman of Jet Airways and president and chief executive officer of Etihad Aviation Group, said: “We will continue to strengthen the partnership between Jet Airways and Etihad Airways by driving further synergies, along with other Etihad Airways partner airlines. In a competitive market, we have together created a winning combination of a wider combined network and exceptional guest experience for travellers to and from India.”
Together, Jet Airways and Etihad Airways are the largest combined scheduled operator of flights to and from India with a 20% market share, Hogan said.