One-time income helps Jet Airways sniff profit, loss narrows by 96%
MIn the same period a year ago, the company reported a net loss of Rs 891 crore.
The airline, however, said the better set of numbers is on account of operational restructuring, higher yield and expansion of code-share agreements with other carriers.
The airline had earlier this week said from 1 December it would discontinue the no-frills brand JetLite.
Fuel cost, which used to account for around 50 percent of operational expenses, has also helped the airline. However, it has not specified its fuel cost during the quarter.
International crude has fallen more than 30 percent since June, while the oil companies have only reduced around 15 percent of retail price of ATF.
During the quarter, Jet completed a 50.1 percent stake sale in its frequent flyer programme Jet Privilege to the UAE carrier Etihad for Rs 305 crore, which owns 24 percent equity in the airline.
Consolidated income rose 13.7 percent to Rs 5,092 crore during the quarter as against Rs 4,480 crore a year ago.
Standalone income jumped 16 percent to Rs 4,772 crore from Rs 4,101 crore, the airline said.
The airline also said its board has approved a proposal to raise up to $300 million in term debt by issuing redeemable preference shares, non-convertible bonds or loan from its foreign shareholder Etihad, which had already extended a $150 million soft loan to the carrier when it sold 24 percent stake to it.
Jet Airways also logged a near 14 percent rise in passenger revenues to Rs 4,277 crore from Rs 3,753 crore a year ago, while the revenue from cargo rose 10.5 percent to Rs 379 crore from Rs 343 crore in the corresponding quarter previous fiscal.
The combined passenger load factor increased by 1.2 percentage points from 77.4 percent to 78.6 percent on account of flying more passengers during the quarter.
Also, yield shot up by a strong 6.4 per cent, as the business plan to reshape the airline, and the benefits of the partnership with Etihad, took hold, the airline said.
Overall, the revenue per available seat kilometer (RASK) rose 7.8 percent to Rs 4.61 from Rs 4.27 in the year-ago period with domestic RASK alone rising 18.6 percent to Rs 5.14 from Rs 4.34.
However, international RASK increased 2.2 percent to Rs 4.32 from Rs 4.23, reflecting a strengthening of the international operations of the airline, Jet Airways said.
“I am extremely pleased by the progress that is evident across several areas during the reporting quarter. This is keeping with our three-year turnaround plan,” said chief executive Cramer Ball, who took over the affairs in September this year. “The operational restructuring initiatives with route and network rationalisation are already yielding dividends on the domestic and international network,” Ball said.
Organic network expansion, coupled with enhanced global connectivity through alliances and code-share pacts, have also helped increase international passenger traffic, Ball said.
All this makes the airline confident that its move to a single brand by December, will help provide the passengers with exceptional value and a significantly enhanced and consistent product offering, he said.
Jet Airways chairman Naresh Goyal had in August announced operations of a single brand by merging low-cost JetLite with the full service Jet Airways in the December quarter.
The strong improved performance for the second quarter comes at a time when Jet’s three-year turnaround strategy and the partnership with Etihad has started impacting the business in a positive manner, the airline said.
The three-year turnaround plan envisages selling of aircraft and restructuring of debts, besides an overhaul of its fleet and products, thereby reducing losses.
“We plan to reduce losses in 2015, consolidate in 2016 and turn profitable in 2017,” Ball had said in July. Also, as part of this plan, the airline plans to increase its global operations to 63 per cent of flights by 2015.
“In our commitment to improve our customer’s experience, the JetPrivilege Programme has been enhanced by the introduction of a new mileage accrual and reward structure, as well as new strategic partnership that will add value and strengthen the travel experience for our Jet Privilege members.”umbai: A one-time income of Rs 305 crore from sale of its loyalty programme to equity partner Etihad helped Jet Airways slash losses to the tune of 95.7 percent at Rs 43 crore in the three months to September.
The airline had reported a whopping Rs 999 crore net loss in the same period a year ago.
For the first time since 2012, the Naresh Goyal-promoted airline, however, on a standalone basis flew back into profit with a net profit of Rs 69.82 crore helped by the one-time income, the airline said in a release.