Jet Airways back in black with Rs 83-crore profit

Lower fuel costs, passenger growth help airline post first profitable Q2 in 8 years

Jet Airways made a consolidated net profit of Rs 83 crore (Rs 830 million) in the second quarter of FY16 compared with a loss of Rs 43 crore (Rs 430 million) in the same period last year, on the back of passenger and revenue growth and lower fuel costs.

The airline said it’s after a gap of eight years that the company was making a profit in the second quarter.

This is also its second consecutive profitable quarter.

Jet Airways made a stand-alone profit of Rs 87.5 crore (Rs 875 million) in the second quarter.

Excluding Rs 45.5-crore (Rs 455-million) provision on account of loss in subsidiary JetLite, the profit would have been Rs 132.5 crore (Rs 1.32 billion).

JetLite, however, continued to show a negative result but it reduced its loss to Rs 50 crore (Rs 500 million).

Jet Airways said its consolidated net profit for the quarter stood at Rs 83 crore (Rs 830 million).

As a practice, Jet Airways releases stand-alone results and subsidiary JetLite’s results and does not share a consolidated profit and loss statement.

Consolidated revenue grew 8.1 per cent to Rs 5,504 crore (Rs 55.04 billion), while passengers flown increased 26.3 per cent to 6.37 million in the quarter under review over the same period last year.

Domestic airlines have been reporting an increase in passenger loads thanks to 10-15 per cent decline in fares.

The airline was also helped by decline in jet fuel costs and its stand-alone fuel bill declined 27.5 per cent to Rs 1,336 crore (Rs 13.36 billion).

Total expenses rose only one per cent to Rs 5,095 crore (Rs 50.95 billion).

The expenses included a provision of Rs 175 crore (Rs 1.75 billion) towards estimated penalties on delayed tax deducted at source.

The airline’s aircraft utilisation increased 10 per cent to 12.6 hours daily and capacity and passenger growth in domestic market was higher than industry growth.

In international business, it registered a 6.6 per cent growth in capacity and 9.7 per cent rise in passengers.

“This improvement is largely the result of optimising the network to enable tighter integration between domestic and international networks, enhanced synergies with partner carriers and improved operational performance,” the airline said in a statement.

Cramer Ball, chief executive of Jet Airways, said: “It is encouraging to report a profit in the second quarter, which is traditionally a lean season for the aviation sector. While the robust competition in the Indian aviation sector continues to put pressure on yields, we have continued to make progress by focusing on improving operational efficiency throughout our business.

"The growth in passengers flown and improved aircraft utilisation have been significant contributors to the performance in the second quarter.”