The Hindu : Business : Jet reports loss

Online edition of India's National Newspaper
Wednesday, Oct 18, 2006
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Business

Jet reports loss

Staff Correspondent

High fuel costs impact operations

MUMBAI: Hit by seasonal lower seat factor and high fuel costs, Jet Airways has reported a loss of Rs. 55.13 crore for the quarter ended September 2006, against a net profit of Rs. 68.59 crore in the same period in the previous year.

Net income from operations was Rs. 1,615.04 crore (Rs. 1,279.64 crore) and other income Rs. 201.19 crore (Rs. 44.60 crore), taking the total income to Rs. 1,816.23 crore (Rs. 1,324.24 crore).

During the period, expenditure was significantly higher at Rs. 1,739.24 crore (Rs. 1,059.90 crore) with a sharp jump in aircraft fuel costs to Rs. 679.20 crore (Rs. 399.64 crore). Domestic operations accounted for 83 per cent (88 per cent) of revenues during the quarter. The second quarter is traditionally characterised by lower seat factors relative to other periods of the year and for Q2 it was 65.6 per cent (71.8 per cent).

The airline generated a pre-tax profit of Rs. 38.90 crore (Rs. 139.10 crore) on domestic operations, including a profit of Rs. 161.70 crore on the sale and subsequent leaseback of three Boeing 737 aircraft in the second quarter. Excluding the sale-leaseback, the domestic operations generated a pre-tax loss of Rs. 122.60 crore.

Turnaround measures

The company has already put in place turnaround measures that include improved asset utilisation, improved fuel management, re-negotiation of contractual agreements, reduction in overheads and a focus on improving process efficiencies.

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