The country’s largest full-service private carrier Jet Airways on Tuesday reported a 106.7% y-o-y increase in net profit to Rs 53.5 crore for the quarter ended June 31, on the back of increased passenger carried during the summer holidays and substantial decrease in provisions made for doubtful loans.
The first quarter is usually regarded as a good one for airlines due to increased travel by consumers during the summer holiday period. As a result, net sales increased by 9.9% y-o-y to Rs 5,648.87 crore. Due to a slowdown in the traffic to the gulf, revenues from the international segment — 60% of the top-line — increased by just 2% y-o-y to Rs 3,070.25 while the same in the domestic segment rose by 20% y-o-y to Rs 2,578.62 crore.
As a result of higher expenses, the operating profit or the EBITDAR decreased by 2.14% to Rs 1,005 crore. The fuel cost — almost 40% of the operating cost — increased by 31.79% y-o-y to Rs 1,524.17 crore while the employee cost increased by 13.5% to Rs 725.03 crore. The bottom line was however boosted by the 30% y-o-y reduction in the provisions made by the company for the doubtful loans.
“Jet Airways took several focused measures to revitalise its business and realise greater efficiencies in spite of weakening international demand, especially from the Gulf. Low fares, together with addition of capacity in the domestic market, continues to put pressure on yields,” said Naresh Goyal, chairman, Jet Airways.
During the quarter, passengers carried increase by 8.1% y-o-y to 7.1 million, while the capacity or available seat kilometres (ASK) grew by 9.1% y-o-y to14 billion. The financial performance was futher helped by a 3.4% y-o-y increase in average ticket prices.
The Mumbai-based airline also announced its plans to launch three new international flights to Amsterdam, Paris and London, from Bengaluru, Chennai and Mumbai, respectively, from October 29.
The new flights from Bengaluru and Chennai are especially significant as they will enable the airline to connect guests in Southern India with Europe and North America for the very first time with non-stop and one-stop flights in codeshare with KLM Royal Dutch Airlines and Delta Air Lines as well as with Air France and Delta Air Lines, respectively.