Jet Airways posts first profit in three quarters

Net income at Rs 106 crore, but sales drop 6 per cent.

Cost-cutting helped Jet Airways post its first profit in three quarters at Rs 106 crore for the third quarter ended December 31, against a loss of Rs 214 crore during the same period last year.

Though the airline registered a rise in passengers, there was a decline of 6 per cent from yields for the quarter to Rs 2,722 crore from Rs 2,908 crore in the quarter ended December 31, 2008.

Domestic operations accounted for 44 per cent of revenues and international operations the rest.

The various cost-cutting measures during the quarter included a 21 per cent decline in employee remuneration to Rs 289 crore and a 19 per cent decline in fuel expenses to Rs 888 crore from Rs 1,094 crore during the same quarter last year. Other operating expenses came down 26 per cent to Rs 701 crore during this quarter.

Analysts, however, feel cutting cost of this size cannot be sustainable. “The Ebitdar (earnings before interest, taxes, depreciation, amortisation and aircraft rentals) margin is at 24.7 per cent, which is decent but cannot be repeated,” said a Mumbai-based analyst, who did not want to be identified.

The boost from the rise in passengers has given the airline reason for optimism. “On the international routes, we were able to achieve seat factor of over 80 per cent for the past few months and we are experiencing a consistent growth in operating margins. We expect to see premium demand revival in the next few quarters,” said a statement from the airline. “Our Jet Airways Konnect no-frills, all-economy, class service has helped us to improve seat factors and overall revenues in the domestic business and we are now in full-fledged operations as per our original plan,” the release added.

With a cautious approach by airlines and rises in passenger numbers, the losses of the three listed private airlines — Jet, Kingfisher and SpiceJet — in the third quarter fell by 37 per cent to Rs 205 crore from the Rs 645 crore losses made during the same period last year.

SpiceJet and Jet Airways improved their financials and made a profit during the quarter, but Kingfisher increased its losses. SpiceJet made a profit after a loss of Rs 17.96 crore during the same period last year. Kingfisher increased its losses to Rs 420 crore from Rs 413 crore during the same period last year.