MUMBAI: Jet Airways, India's largest airline,
ended its five consecutive quarters of losses with a modest profit of Rs 24.70
crore for the June quarter, aided by higher fares, sale and lease back of
aircraft and amortisation of forex losses.
The airline upped its passenger revenues by 19.5%, riding on firming of yields on domestic network as competitors stopped selling tickets below cost. Jet is the second listed airline company to return to the black after SpiceJet announced a profit last week. Cost control and revenue improvement helped Jet post profit, the airline said.
Jet's promoter and chairman Naresh Goyal attributed the enhancement of revenues to a brand merger of JetLite (erstwhile Air Sahara that was acquired by Jet) and JetKonnect (Jet's new product offering in 2009), mooted in 2011 and formalised in 2012.
Addressing shareholders of Jet at its AGM in Mumbai on Friday, Goyal said: "This combined (brand) with the introduction of premier class on additional JetKonnect flights has helped improve our revenues and made us more competitive in the low to moderate fare segments and also expanded our presence in the premier segment."
It reported forex losses of Rs 70 crore this quarter. Analysts such as KRIS Research CEO Arun Kejriwal were, however, not impressed. "They are trying to ride on the sentiments currently prevailing in the sector that there is a turnaround with one bed-ridden competitor."
Despite reporting a growth of more than 10% in the number of passengers travelling by its airline for the current quarter, the Jet chairman warned of challenging times ahead for airline companies in the country as the taxes (specifically air turbine fuel) and levies (airport charges) and service tax are mounting by the day. The soaring cost overheads adversely impact any attempt by the airline companies to better performance.
Analysts are aware that the turnaround by SpiceJet and Jet has come about without reining in costs. Says Kejriwal: "All other numbers do not give comfort and until a dramatic fall in operating costs happen, the future (for airlines in India) continues to remain uncertain."
On account of tariff hike by the Delhi International Airport, Jet said it would incur an additional cost of Rs 55 crore annually. "Airport charges have diminished and negated any positive impact on airline balance sheets," Goyal said.
"I would like to strike a note of caution on the high tax levy on air turbine fuel and sincerely hope that it may be rationalised. Together with steep airport levies, airline balance sheets have been adversely impacted. This is the burden neither the airline nor out passengers can afford to bear any longer," said Goyal.
"Aviation should not be treated as luxury, it is essential to economic growth of the country," he advocated.
The airline upped its passenger revenues by 19.5%, riding on firming of yields on domestic network as competitors stopped selling tickets below cost. Jet is the second listed airline company to return to the black after SpiceJet announced a profit last week. Cost control and revenue improvement helped Jet post profit, the airline said.
Jet's promoter and chairman Naresh Goyal attributed the enhancement of revenues to a brand merger of JetLite (erstwhile Air Sahara that was acquired by Jet) and JetKonnect (Jet's new product offering in 2009), mooted in 2011 and formalised in 2012.
Addressing shareholders of Jet at its AGM in Mumbai on Friday, Goyal said: "This combined (brand) with the introduction of premier class on additional JetKonnect flights has helped improve our revenues and made us more competitive in the low to moderate fare segments and also expanded our presence in the premier segment."
It reported forex losses of Rs 70 crore this quarter. Analysts such as KRIS Research CEO Arun Kejriwal were, however, not impressed. "They are trying to ride on the sentiments currently prevailing in the sector that there is a turnaround with one bed-ridden competitor."
Despite reporting a growth of more than 10% in the number of passengers travelling by its airline for the current quarter, the Jet chairman warned of challenging times ahead for airline companies in the country as the taxes (specifically air turbine fuel) and levies (airport charges) and service tax are mounting by the day. The soaring cost overheads adversely impact any attempt by the airline companies to better performance.
Analysts are aware that the turnaround by SpiceJet and Jet has come about without reining in costs. Says Kejriwal: "All other numbers do not give comfort and until a dramatic fall in operating costs happen, the future (for airlines in India) continues to remain uncertain."
On account of tariff hike by the Delhi International Airport, Jet said it would incur an additional cost of Rs 55 crore annually. "Airport charges have diminished and negated any positive impact on airline balance sheets," Goyal said.
"I would like to strike a note of caution on the high tax levy on air turbine fuel and sincerely hope that it may be rationalised. Together with steep airport levies, airline balance sheets have been adversely impacted. This is the burden neither the airline nor out passengers can afford to bear any longer," said Goyal.
"Aviation should not be treated as luxury, it is essential to economic growth of the country," he advocated.
http://economictimes.indiatimes.com/news/news-by-company/earnings/earnings-analysis/jet-airways-posts-rs-25-cr-profit-in-q1-after-losses-for-five-consecutive-quarters/articleshow/15346445.cms?
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