Jet Air incurs Rs 225-cr net loss in first quarter

Mumbai: Lower yields due to intense competition, overcapacity in the market, and high interest costs have resulted in Jet Airways posting a net loss of Rs 225 crore in the first quarter ended June 30, 2009 against a profit of Rs 143 crore in the corresponding period last year.
Jet foresees the lower yield environment to continue in the domestic business for the next few months as airlines continue to offer low fares in a bid to improve the seat factor in the lean season. In its forecast for the coming months, the company does not see the situation changing until the economic scenario improves leading to higher passenger traffic.
Jet has also reduced its pre-tax losses on international routes to Rs 77 crore against Rs 283 crore. While it does not expect significant yield improvements in the next few quarters on international routes, the airline plans to focus on maximising revenues through higher seat factor levels. Currently, these are in the mid to high 70s (in percentage terms) and very close to breakeven levels.
According to the company, structural improvements in this industry will occur only through overall capacity reduction, eventually leading to lower pressure on yields. However, the overall environment is expected to improve from the peak season in the third quarter.
24/07/09 Business Line

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Categories: Jet Airways Jul 2009