Jet Airways Q1 net more than doubles
Airways (India) Ltd’s net profit more than doubled in the June quarter as healthy domestic growth offset muted earnings from its global operations. It was also bumped up by higher other income and gains on foreign exchange.
Profit rose to Rs53.5 crore in the three months to June from Rs25.88 crore a year ago.
Revenue at the airline run by Naresh Goyal increased 11.4% to Rs5,953.92 crore from Rs5341.26 crore last year. A higher other income during the quarter that included income from the completion of a real estate development project and gains on account of foreign currency fluctuation, also boosted profits. Total other income increased to Rs305 crore from Rs202 crore a year ago.
The earnings, the firm said in a note, were also helped by a slight increase in domestic average fares, which advanced 3.4% during the quarter, reversing an otherwise declining trend witnessed in the last few quarters.
“Jet Airways took several focused measures to revitalize its business and realize greater efficiencies in spite of weakening international demand, especially from the Gulf,” chairman Goyal said in a statement.
Jet Airways’s earnings missed net profit estimates. A Bloomberg poll of three analysts had estimated a net profit of Rs69.47 crore.
“Had it not been for the higher other income, the earnings would have been depressed like the previous quarters,” said an analyst at a domestic brokerage, declining to be identified. He said unlike its peers, Jet has not been able to take much advantage of the increase in air fares, and the gains have been eroded by higher costs.
The airline’s total expenses during the quarter rose to Rs5,843.8 crore from Rs5,234.4 crore a year ago.
Goyal said low fares, together with the addition of capacity in the domestic market, put pressure on yields.