Fuel cost spike lands Jet in red

Mumbai: After posting profits for three successive quarters, India's largest airline by market share, Jet Airways, reported a net loss of Rs 124.5 crore for the 2010-11 fourth quarter. A 50 per cent increase in fuel costs led to a fall in margins and resulted in the loss.
On a year-to-year basis, the airline reported a small profit of Rs 9.6 crore on a standalone basis compared to a loss Rs 467 crore in 2009-10, but the results were a dampener as analysts expected the airline to post better figures.
Revenues were up 14 per cent at Rs 3,288 crore, while passenger figures grew 15 per cent. However, this was subdued by 51 per cent increase in fuel costs in the fourth quarter over the same period last year. In the backdrop of spiralling crude oil prices, Jet Airways spent Rs 1,279 crore on fuel which was Rs 443 crore higher than same period last year. As a consequence the airline's operating margins took a hit and halved to Rs 343 crore.
Jet Airways and its low cost arm JetLite command 25 per cent of market share in passenger traffic. JetLite's losses widened to Rs 166 crore from Rs 75 crore in the fourth quarter in 2009-10 and operating margins, too, declined. Its Ebitda (earnings before interest, taxes, depreciation, and amortisation) was Rs 26 crore as against Rs 119 crore for the same period last year. In its results analysis Jet Airways said that it carried out cost control measures and route rationalising exercise, which resulted in substantial cost saving.
20/05/11 Business Standard

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Categories: Jet Airways May 2011