Jet Airways posts Rs221.70 crore net profit in 1Q
Jet Airways (India) Ltd, the country's second-largest airline by passengers carried, on Friday reported a net profit for the fiscal first quarter compared with a loss in the year-ago period, as it benefited from lower fuel prices, higher other income and a one-time gain from aircraft lessors.
The Naresh Goyal-promoted airline reported a profit of Rs.221.70 crore in the three months ended 30 June, compared with a loss of Rs.217.65 crore in the yearago quarter. Net sales increased by 11.55% to Rs.4,834.50 crore from Rs.4,334.07 crore a year ago.
Jet Airways, in which Etihad Airways PJSC has a 24% stake, was expected to post a net loss of Rs.53.70 crore on net sales of Rs.5,252.30 crore, according to a survey of analysts by Bloomberg. Aviation consultancy firm Capa India was expecting Jet Airways to report a net profit of Rs.260390 crore on sales of Rs.5,861.70 crore.
Fuel costs, which add up to 45-55% of an airline's revenues, have fallen over the past year, allowing local airlines to improve profitability. Since fares have fallen less than operating costs, airlines have been able to reduce losses.
The difference between the average fare and the average break-even fare for a Mumbai-Delhi flight was at Rs.1,221 in May 2014, according to a study done by Boeing Co. This difference reduced to just Rs.395 by May 2015-a nearly 68% reduction in losses.
Fuel cost for Jet Airways fell by 20% to Rs.144.69 crore compared with Rs.1,804.77 crore.
The airline reported higher other income at Rs.159.27 crore as against Rs.55.02 crore for the quarter ended 30 June 2014. Other income was higher due to profit on sale and lease back of engines. The airline also reported an exception gain due to receivables from aircraft lessors of Rs.127.95 crore as against Rs.39.10 crore.
Jet Airways' domestic capacity grew by 13.3% and passenger traffic increased by 25.4%, significantly exceeding industry growth.
"Our performance in the first quarter of this financial year demonstrates once again that the measures we are taking to bring the business back to profitability are having the desired result," Jet Airways founder chairman Naresh Goyal said, adding that all key performance indicators have shown progress.