Steep Q2 loss for Jet Airways
29 Oct 2008
Jet Airways reported a Rs355.927 ($71.5 million) loss in its fiscal second quarter, ended 30 September, reversed from a Rs28.3 crore ($5.68 million) profit in the year-ago period, in the face of worsening industry conditions. "The impact of the global meltdown and the resultant slowdown in traffic has been felt by airlines across the world and India has been no exception to this," Jet said.
Jet, which is India's largest private full service carrier by number of passengers carried, clarified that the September quarter "is historically the weakest quarter of the year in terms of demand".
It said Q2 revenue was up 44.6% year-over-year to Rs3,258 crore ($654.47 million) even as passenger numbers rose 7.6% to 2.8 million.
Pre-tax loss was Rs579 crore ($116.31 million) compared to a Rs42.5 crore ($ 8.53 million) profit for the same period last year.
The company's low-cost subsidiary JetLite posted a net loss of Rs273 crore ($54.84 million), significantly higher than a loss of Rs86.27 crore ($17.33 million) in the year-ago period.
Load factor was down 6.8 per cent, to 61.2% .
Jet's half-year loss of Rs241 crore ($48.41 million) compares to a Rs59.2 crore ($11.89 million) profit for the same period a year ago.
It said revenue was up 45.3% to Rs6,158 crore ($1.23 billion) .
Both airlines are now part of a combined operations that includes code-sharing and reservations systems. Jet Lite had shed 1,000 employees last month and company officials have expressed confidence that they will be able to turn around the subsidiary's operations in a few months.
Jet said that it would postpone all aircraft deliveries "by at least a year" and will also retire four 737s from the fleet. It clarified that it had not canceled any orders. It said capacity additions would "largely" be on regional routes operated with ATR 72-500s.
Jet said long-haul operations "will take another 1-2 quarters to stabilize" as a result of the global economic slowdown. "We are eliminating our highest loss-making routes from the international network and have right-sized our capacities on the North American routes," a company statement said.
It said it was halting operations on the Mumbai-Shanghai-San Francisco and Amritsar-London Heathrow routes by February next year. These two routes accounted for nearly half its international losses during the quarter.
The carrier also said it would lease out four surplus wide-bodies for the "medium term."
