Jet Airways has posted a first-quarter net profit, as the airline earned higher income. Rationalisation of routes also appears to have paid dividends. The airline has been in the red for five quarters in a row. In the April to June quarter, the company posted a net profit of about Rs 25 crore against a net loss of Rs 123 crore a year ago.
The Mumbai-based airline, which operates in two segments — Jet Airways (premium segment) and Jet Konnect (low-cost) — said its results were boosted by a Rs 52-crore profit due to sale and lease-back of aircraft in the quarter. The results come on the back of peer, SpiceJet, posting a profit earlier this week. In the case of Jet, fuel costs increased about 26 per cent to about Rs 1,967 crore.
Falling rupee
Despite the decline in price of international crude, the gains were offset by a depreciating rupee. The airline also operated more aircraft on select routes, which increased the total fuel used. Fuel cost accounted for a little more than 45 per cent of the total expenses.
Revenue increased about 31 per cent to Rs 4,711 crore (about Rs 3,582 crore a year ago). International operations contributed about 56 per cent to the revenue, while the rest came from domestic operations.
Most airlines had increased ticket prices for domestic travellers earlier this year, after flight cancellations by the troubled Kingfisher Airlines and state-run Air India had passengers migrating to other airlines. This also contributed to Jet’s revenue. In the domestic segment, the airline had a market share of 27.9 per cent. “We will not add any new routes in the current financial year, but we will increase the frequency in certain routes like the Gulf,” Nikos Kardassis, Chief Executive, Jet Airways, said.
Outlook
The company said it will bring down its debt burden by about $400 million this financial year. It has a total debt of $2.46 billion. The company said it would complete the sale and leaseback of 8-9 aircraft in the current quarter in a bid to “reduce debt and release cash.” On Thursday, the scrip closed at Rs 374.60, up 0.69 per cent on the Bombay Stock Exchange.