Jet Air Profit Plunges in Q3 on Ris­ing Fuel Prices

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

Mum­bai: Jet Air­ways on Fri­day said its con­sol­i­dated quar­terly net profit plunged by a third, hurt by weak rev­enue growth and ris­ing fuel prices.

Jet's earn­ings de­cline in­di­cate that In­dia's air­lines will find it dif­fi­cult to sus­tain their prof­itabil­ity, barely a year after they came out of a long spate of losses.

Jet, In­dia's sec­ond big­gest air­line by mar­ket share, posted a con­sol­i­dated net profit of ₹ 156.3 crore for the Oc­to­ber-De­cem­ber quar­ter, com­pared to ₹ 467.1 crore, a year ear­lier. To­tal rev­enue rose just 0.9% to ₹ 5,932.9 crore.

The con­sol­i­dated num­bers in­clude those of the full ser­vice car­rier and its sub­sidiary JetLite. Jet's Oct-Dec FY16 per­for­mance had been its best ever.

Jet's profit be­fore tax for Q3 FY17, plum­meted 91% to ₹ 44.3 crore whi- le the air­line's fuel costs for the quar­ter rose 17% to ₹ 1,545.8 crore. Its staff also costs grew 23% to ₹ 747.7 crore.

Jet's net profit was propped up by a 51% rise in its other in­come, which in­cluded profit from sale and lease­back of planes, to ₹ 290.40 crore. A long-stand­ing ten­dency to sell be­low costs for fill­ing up planes, cou­pled with a more re­cent crawlup of fuel prices have dented air­lines' mar­gins. Ear­lier this week, IndiGo posted a 25.1% de­cline in its net profit to ₹ 486.5 crore.

Cost of jet fuel at the Delhi air­port--In­dia's busiest-- rose 8% in Novem­ber com­pared to Oc­to­ber, then de­clined a tad in De­cem­ber be­fore ris­ing again in Jan­uary. On Feb 1, were in­creased by 3%, go­ing be­yond the lev­els of 2015, when prices had started fall­ing, lead­ing to a turn­around in for­tunes for the air­line in­dus­try. Jet fuel is the big­gest op­er­at­ing cost chunk for an In­dian car­rier.

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