Higher jet fuel prices, lower yields from the domestic operations and start up losses in international sectors resulted in Jet Airways reporting a net loss Rs 91.1 crore in the third quarter this year ended December 31, 2007. This was against a net profit of Rs 40 crore for the same quarter of the previous year.
As Jet Airways increased its total capacity by 43 per cent, its total income increased from Rs 1,969.6 crore for the quarter ended December 31, 2006 to Rs 2,517.1 crore for the quarter ended December 31, 2007.
“During this quarter ATF prices were higher by 13 per cent and this caused additional burden of Rs 70 crore that contributed to the losses. International business has now gone up to 35 per cent of the total business and there were start up losses as the North American operations are yet to stabilize,” said K G Vishwanath, senior General Manager, MIS and Investor Relations, Jet Airways India.
Jet Airways started multiple flights from India to New York and Toronto between August and November 2007. It also started its operations into the Middle East sectors starting January 5, 2008 for which resources were mobilized well before December. An international sector normally breaks even between 12 to 18 months and the start up loses were on expected lines. Except the South East Asian operations, which are yielding profits, Jet Airways lost money on the new sectors.
Out of the total loss of $33 million, Jet Airways lost $3 million from domestic operations while the balance $30 million were from international operations.
“Despite the competition our load factor in the domestic sector were up to 73 per cent as against 70 per cent in the same quarter last year. Our market share including JetLite was around 30 per cent,” said Vishwanath.
Meanwhile, Jet Airways is planning to raise Rs 800 crore including the Rs 400 crore rights issue to fund its ambitious international expansion. The board of director of the airline on Monday asked the management to look for possibility of raising additional Rs 400 crore through Qualified Institutional Placement (QIP) or by any other mode, subject to the approval of the Shareholders and regulatory authorities.