Kingfisher, Jet break-even not before 2010: Experts

Mumbai: Even as the country’s two largest private carriers — Kingfisher Airlines and Jet Airways — are claiming that they will break even in the current fiscal, not everyone is excited. Audit firms, analysts and aviation industry trackers are sceptical about those claims.
Vijay Mallya’s Kingfisher Airlines, a player in the full-services and no-frills segment, expects to achieve operational breakeven this month.
This was conveyed by Mr Mallya at the company’s annual general meeting last Friday in Bangalore. The Naresh Goyal-promoted and the country’s largest private carrier, Jet Airways, is eyeing a break-even by the end of this fiscal.
Analysts think that break-even claims made by these airlines will be difficult to achieve. Emkay Global Financial Services research head Daljeet S Kohli told ET: “The crude and aviation turbine fuel (ATF) prices have seen a drop though a back-of-the envelope calculation indicates that a break-even in the current fiscal will not be possible.
It will take some more months for the airlines to emerge from the red.” Some believe that the objective of making these claims on break-even is to attract funding in some form. “It is not something that can be achieved that easily. No domestic carrier would get out of air pocket by 2010,” said an aviation expert on the condition of anonymity.
The financials of the airlines have not made the best story either. Jet reported its worst quarterly performance in over three years, incurring a net loss of Rs 384 crore in the September quarter. This was against a net profit of Rs 28 crore for the same period during the previous fiscal.
The combined loss for Jet and JetLite stood at nearly Rs 690 crore for the year ended March 31. Meanwhile, Kingfisher reported a 90% increase in its net loss to Rs 483.2 crore. Both Kingfisher and Jet Airways owe huge amounts—in excess of Rs 5,000 crore— to the major oil companies, the Airports Authority of India (AAI) and private airport operators.
29/12/08 Mithun Roy/Economic Times

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Categories: Jet Airways Dec 2008, Kingfisher Dec 2008