Cheaper fuel helps Jet Airways cut losses
19 Jan 2009
Jet Airways reported a Rs14 billion ($42.8 million) loss in its third fiscal quarter ended 31 December, widening from a Rs911.2 million deficit in the same period last year, and said that it will maintain focus on "domestic market consolidation" and "cost reduction initiatives," including plans to rationalize the workforce.
The Indian carrier said falling fuel prices and rising yields helped it improve from a horrible second quarter in which it lost Rs3.85 billion. Third-quarter revenue rose 24.6 per cent year-over-year to Rs30.23 billion, while expenses climbed 24.7 per cent to
Rs31.07 billion, deepening operating loss to Rs840.6 million from the Rs661.7 million suffered in the quarter ended Dec. 31, 2007.
Systemwide traffic, including for its JetLite subsidiary, rose 17.9 per cent to 5.37 billion RPKs, against a 23.2 per cent climb in capacity to 8.11 billion ASKs. Load factor fell 2.9 points to 66.2 per cent and passenger numbers were down 13.1 per cent to 2.6 million. JetLite reported a Rs220 million loss in the quarter, down from Rs 860 million in the year-ago period.
Jet said traffic during the period was hurt by the global economic downturn and November's terrorist attacks in Mumbai, but that efforts to boost or maintain yield through capacity cuts have helped preserve operating margins. It expects domestic capacity to be "flat over the "next few quarters" while loads will rise on international services owing to capacity reductions.
From April, Jet will lease out an additional four 777s and will not renew leases on three 737 Classics when they expire this quarter. It currently operates 10 777-300ERs, 51 737s, 12 A330-200s and 14 ATR 72-500s. JetLite uses 17 737s and seven CRJ200s.
The nine-month loss of Rs 55 billion compares to a Rs 318.8 million deficit during the period last year. Operating loss rose to Rs 2.37 billion from Rs 4.04 billion.
