Jet net dips 53% to Rs 61 crore

Spurt in operational costs and fuel price plays spoilsport.

Jet Airways India registered a 53 per cent decline in net profit to Rs 61.01 crore in the third quarter ended December 31, 2005, against Rs 129.63 crore recorded in the corresponding period last year.

The company, which announced the acquisition of Air Sahara last week for an enterprise value of $500 million, posted 22 per cent growth in income from operations at Rs 1,499.03 crore for Q3 FY06 versus Rs 1,230.90 crore in the comparable period of the previous year.

Analysts attributed the decline in profit to huge spurt in operating expenses. Total expenditure during the period went up to Rs 1,237.05 crore compared with Rs 846.43 crore during the same period last year.

Operating expenses, including aircraft lease rentals, went up to Rs 457.68 crore (Rs 293.81 crore). Aircraft fuel expenses shot up to Rs 448.70 crore (Rs 313.46 crore).

Analysts said the severe shortage of pilots led to cancellation of over 750 flights during the quarter.

Executive director Saroj Datta said the company has achieved positive results for the quarter despite supply exceeding demand in the domestic aviation industry.

Besides, higher fuel costs were not fully mitigated through fares hikes, and the company suffered operating losses on newly launched routes, he added.

"Profitability of our domestic business remains strong with seat factors consistently above 70 per cent. Going forward, we will be focussed on consolidating our leadership in the domestic market through several innovative and targeted sales and marketing initiatives," Datta said. Simultaneously, we will focus on progressing towards break-even on our international operations," Datta said.