Thursday, February 03, 2011

Jet Airways’ quarterly earnings disappoint on overseas services

Jet Airways (India) Ltd reported 20% growth in stand-alone year-on-year (y-o-y) revenue for the quarter ended December, against 32% for the September quarter. Of course, the base for the September quarter was lower, but given that the December quarter is supposed to be the best for aviation firms, the numbers could have been better.
The disappointment has come from the company’s international operations. International revenue had increased 27% in the September quarter, but slowed to 18.5% in the December quarter. The domestic business has performed relatively better, posting 21% growth, though it, too, grew at a much faster y-o-y pace of 39% in the September quarter. In the September quarter, the international business had boosted Jet Airways overall financials. According to an analyst, “The international business has grown at a slower pace compared to the domestic business because of a marginal decline in revenue per passenger.”
In a note to clients last September, analysts from Motilal Oswal Securities Ltd pointed out that Jet Airways’ outlook for its international business is positive as the firm has significant cost advantage versus other international carriers. That, however, isn’t reflected in the financials this time.
03/02/11 Pallavi Pengonda/Live Mint
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