Jet Flies High With Rs 426-cr Profit
Airline had a net loss of Rs 1,803 crore in the corresponding March quarter
Cost savings helped Jet Airways post a consolidated net profit of Rs 426 crore in the March quarter, the final one (Q4) in 2015-16. In the same quarter last year, it had a net loss of Rs 1,803 crore, due to the write-off of its equity investment in subsidiary JetLite.
The airline reported its highest ever consolidated annual profit of Rs 1,212 crore in FY16 and achieved full-year profit a year earlier than the target set in its turnaround plan two years ago. This was also the airline’s first annual profit in eight years. The airline said it had reduced debt by Rs 1,680 crore in FY16.
Revenue on a standalone basis grew a modest 3.5 per cent to Rs 5,245 crore over a year but a 25 per cent decline in the fuel bill helped the airline lower its costs and report a profit. While Jet reported a standalone profit of Rs 397 crore, JetLite made a profit of Rs 29 crore.
Overall expenses on a standalone basis were 13 per cent lower over a year, with less on on salaries, sales and distribution, maintenance and other operating costs. In Q4 of FY15, the airline paid salary arrears and had also made a provision of Rs 175 crore towards income tax dues.
“The improvement in performance has been achieved largely due to the combination of enhanced fleet utilisation and optimisation of network, which enabled better integration between domestic and international operations. Additionally, the implementation of a full service strategy across the domestic operation, supported by the ‘Guest First’ approach, along with an increased focus on premium traffic, has contributed positively,” the airline said.
“The competitive and structural challenges in the Indian aviation market continue to exist. In addition, the induction of capacity and the enhanced competitive scenario is creating a constant pressure on yields,” said Naresh Goyal, chairman.
The airline reported its highest ever consolidated annual profit of Rs 1,212 crore in FY16 and achieved full-year profit a year earlier than the target set in its turnaround plan two years ago. This was also the airline’s first annual profit in eight years. The airline said it had reduced debt by Rs 1,680 crore in FY16.
Revenue on a standalone basis grew a modest 3.5 per cent to Rs 5,245 crore over a year but a 25 per cent decline in the fuel bill helped the airline lower its costs and report a profit. While Jet reported a standalone profit of Rs 397 crore, JetLite made a profit of Rs 29 crore.
Overall expenses on a standalone basis were 13 per cent lower over a year, with less on on salaries, sales and distribution, maintenance and other operating costs. In Q4 of FY15, the airline paid salary arrears and had also made a provision of Rs 175 crore towards income tax dues.
“The improvement in performance has been achieved largely due to the combination of enhanced fleet utilisation and optimisation of network, which enabled better integration between domestic and international operations. Additionally, the implementation of a full service strategy across the domestic operation, supported by the ‘Guest First’ approach, along with an increased focus on premium traffic, has contributed positively,” the airline said.
“The competitive and structural challenges in the Indian aviation market continue to exist. In addition, the induction of capacity and the enhanced competitive scenario is creating a constant pressure on yields,” said Naresh Goyal, chairman.
Jet has not made an addition to its fleet and has improved capacity only through better asset utilisation. While rival IndiGo is ramping up capacity, with planned addition of 29 planes this financial year. Yields, too, are under pressure, due to intense competiton. The airline's load factor in Q4 was much lower on a year-on-year basis.
However, its partnership with Etihad Airways has helped it to grow its code business and increase traffic flows. Overall codeshare traffic for Q4 grew 21 per cent to 570,000 passengers. A wider network of codeshares now enables Jet to offer significantly enhanced global connectivity and has helped deliver the increase in passenger traffic, the airline said.
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