The Hindu Business Line : Jet flies back to black after 2 quarters of losses

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Mumbai Jan 19 After clocking high losses in the first two quarters of the current fiscal, Jet Airways has managed to return to black in the third quarter, aided by lower fuel costs and peak season rush.

Jet has posted third-quarter net profit of Rs 40 crore, down 34 per cent from the corresponding previous period, when it registered a net profit of Rs 61 crore.

The company had posted losses of Rs 45 crore and Rs 55 crore in the first and second quarters of the current fiscal.

Mr Wolfgang Prock-Schauer, CEO, said that higher load factors, stabilising costs, high yields and a lower break-even point were responsible for the upturn in the airline's fortunes this quarter.

The load factor at which the airline reaches break-even has come down to 70 per cent, according to him. "We feel very confident that we can achieve higher than 70 per cent load factors."

The airline benefited from a load factor of 50 per cent in the premium classes, which naturally increased the yield per passenger.

Jet's yield for the domestic sector was Rs 5,570 per passenger, including surcharges, up 4.2 per cent from the same period last year. Its yield from international operations stood at Rs 16,290.

Net income from operations was up 31 per cent to Rs 1,935.7 crore, while operating expenses rose to Rs 1,795.3 crore, recording an increase of 45 per cent.

The increase in expenses can be attributed to the airline's expansion and the increase in fuel prices.

While the company saved roughly Rs 1.2 crore on account of lower fuel prices in comparison with the previous quarter, fuel prices were up 10 per cent from the same quarter last year. Fuel accounted for roughly 35 per cent of total operating costs.

The domestic sector accounted for 78 per cent of revenues, down from 86 per cent in the same period last year.

The load factor for the domestic sector was 70.1 per cent, compared to 72.5 per cent earlier, and up from 64 per cent in the previous quarter.

The airline also generated Rs 48 crore profit from the sale and lease-back of a Boeing 737 aircraft in October.

The company posted pre-tax loss of Rs 11 crore on its international operations, down from Rs 34.7 crore over the same period last year and Rs 111.4 crore in the previous quarter.

Mr Prock-Schauer said that the airline was making a profit from its SAARC and Asean routes.

It was close to reaching break-even on the India-London routes.

The airline plans to start flying to the US in August. Its first flight would be on the Mumbai-Brussels-New Jersey route.

The Jet scrip rose 1.2 per cent to close at Rs 723.65 on the BSE on Friday. The intra-day high was Rs 738.