Jet Air­ways posts Rs221.70 crore net profit in 1Q

The Pak Banker - - COMPANIES/BOSS -

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.

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