The Hindu Business Line : Jet Airways loss doubles on high fuel costs, lower loads

Mumbai, Jan. 16 Jet Airways has posted a loss of Rs 214 crore in the third quarter, more than double the net loss of Rs 91 crore recorded in the same period last year.

High fuel and other operating costs coupled with lower load factors contributed to the huge losses in the quarter. However, fare increases in the form of fuel surcharge helped its income grow 22 per cent, to Rs 3,063 crore.

The `other operating expenditure’ jumped on account of a rapid increase in the airline’s international operations. It also includes $10 million (Rs 49 crore) of forex losses, which does not figure in the same quarter last year.

Jet also reiterated that its alliance with Kingfisher Airlines was going strong. “The working groups are doing their tasks and we will see synergies shortly. Some trial runs will also begin in the next few months,” Mr K.G. Vishwanath, Senior General Manager-MIS and investor relations, told Business Line.

Cost-cutting measures

Meanwhile, tough cost-cutting measures will continue at Jet over the next few months. Rationalisation of manpower figures prominently in the list. “Over the next few months, we will rationalise workforce,” said the company statement.

In a sudden development late last year, Jet laid off 1,900 employees. However, large-scale demonstrations compelled the Chairman, Mr Naresh Goyal, to revoke the decision.

A significant cut in salaries across ranks was also announced this December though Mr Vishwanath said it had not been implemented yet.

The focus on consolidating the domestic market will continue. The impact of its renegotiated agreements for goods and services will begin to show from the fourth quarter, said the statement.

On an annualised basis, the savings would be in the range of $50-80 million (Rs 245 crore to Rs 384 crore), said Mr Vishwanath.

On the operational front, Jet sees corporate traffic being hit in the current quarter because of the economic slowdown. Yields and front end load factor will suffer.

However, the full impact of reduction in price of aviation turbine fuel (ATF) will lower operating costs.

Jet said it has received Rs 1,250 crore towards its working capital requirements from Indian banks. It will draw an additional Rs 750 crore as term loans in the next few weeks.

The stock price of Jet Airways closed with a gain of 1.26 per cent on Friday at Rs 157.05.