Jet posts Q2 loss of Rs 55.13 crore
Jet reports the loss due to declining yields and higher fuel and operating costs, reports Ranju Sarkar.india Updated: Oct 17, 2006 20:19 IST
Like most other airlines, Jet Airlines too has reported a net loss of Rs 55.13 crore for the second quarter plagued by declining yields, higher fuel and operating costs and increasing losses in international operations.
It had posted a net profit of Rs 68.59 crore for the same quarter last year, amounting to a swing of nearly Rs 123.72 crore this time during a quarter when the airline increased its revenues by 38 per cent to Rs 1821 crore.
Jet's pre-tax losses would have been even higher at Rs 122.60 crore but for the sale and leaseback of three Boeing planes that generated a profit of Rs 161.7 crore. "As a result of the widespread discounting, industry-wide average revenue per passenger was lower by 15 per cent," said Jet in a media statement.
Jet had to sell 65 per cent of its seats on discounted fares (up from 60 per cent in the last quarter). Losses on international operations increased to Rs 111.4 crore as competing airlines increased their frequency of flights on routes Jet started flying. Analysts say Jet will continue to bleed on international operations for at least another two years.
Jet's wage bill went up 81 per cent, fuel costs spiralled by 70 per cent, lease rentals rose by 45 per cent as it went into more sale and leaseback deals, commissions shot up 41 per cent, while other operating expenses was up 58 per cent.
The silver lining for Jet is that its domestic operations are still profitable. It has come severe pressure here too, but is yet out of the red. Pre-tax profits on domestic operations came down to around Rs 40 crore this quarter compared to Rs 131 crore in the corresponding quarter last year. ''Given the environment, it's a steady performance,'' said Kapil Kaul, CEO for India and Middle East, Centre for Asia-Pacific Aviation.
Analysts feel the next couple of quarters would be better as occupancies are better. But yields will continue to remain under pressure, as existing and new players will keep adding more planes. The Jet Airways' scrip fell 1.83 per cent on the Bombay Stock Exchange, which fell by 0.34 per cent.