Jet Airways said that it would not significantly add capacity during 2012-13. However, the domestic aviation market leader expects yield, revenue/passenger, to improve significantly during the current quarter ending March 31.
Jet's share rose to Rs 244.55 on Tuesday on Bombay Stock Exchange, 1.22 per cent higher than the previous closing.
Lower losses
This happened because the company posted losses lower than the market's apprehension - at Rs 101.2 crore during quarter ending December 31, 2011. Analysts had estimated a Rs 300-crore loss.
Addressing an analyst conference call post-third quarter results (October-December 2011), the Jet management indicated that capacity induction in the next financial year would be “sedate” at around five per cent.
Growth in passenger demand
This is happening at a time when the latest Directorate General of Civil Aviation's (DGCA) data showed that growth of passenger demand for all scheduled domestic airlines had slipped to single digit during December.
The management also expected the current quarter yield to improve despite lingering concerns over fuel cost and foreign currency fluctuation.
“We're actually seeing yields at a much better level compared with what we had in quarter three,” it said. However, it expects flat revenue during 2012-13.
Panic selling by travel agents of tickets of a rival airline in distress put a lid on fares during October-December, the management said.
There were also instances where competition pre-sold quite a lot of their seats to online travel agents and most of these were being dumped in the market, given the uncertainty of flying of one of our competition, it added.
Jet Airways pulled out of some domestic long haul markets in favour of short haul, putting further pressure on yields.
The management pegs domestic aviation industry growth at 12-15 per cent in the short-term, spurred by an increase in revenue from US and Europe.