Q1 Results: Jet Airways Reports A Loss For The Second Straight Quarter
Jet Airways (India) Ltd., which had deferred announcing its results, reported a loss for the second straight quarter, hurt by surging fuel costs, competitive fares and foreign exchange loss.
The Naresh Goyal-led carrier reported a Rs 1,323-crore loss for the first quarter ended June compared with a Rs 54-crore profit in the year-ago period. Analyst estimates compiled by BloombergQuint had pegged the loss at Rs 495 crore. Jet Airways had posted a Rs 1,036-crore loss in the previous quarter.
- Revenue rose 6.4 percent year-on-year to Rs 6,010 crore. That was lower than the estimated Rs 6,323 crore.
- Ebitdar loss stood at Rs 382 crore.
- Margin contracted to -6.3 percent from 11.7 percent last year.
- The bottom line was hit by a forex loss of Rs 365 crore.
India’s second-largest airline is facing a cash crunch as aircraft fuel expenses jumped 53 percent over the year-ago period. Aviation fuel in India is the most expensive in Asia due to higher taxes. Rising global crude prices have only made it costlier.
That coupled with a weakening rupee and cheaper ticket prices in a highly competitive market have led to erosion of profit margin for Indian airlines. Even the country’s biggest airline, IndiGo, wasn’t immune, reporting its worst profit in the quarter ended June. Being a full-service airliner, Jet Airways’ costs are higher compared to its budget peers.
- The company management is considering cost cuts, debt reduction and funding options, including infusion of capital and monetisation of assets.
- Jet Airways plans to induct another 10 B737 MAX aircraft into its fleet during the year.
- The airline is looking to reduce non-fuel CASK (available seat miles) by 12-15 percent in the next 8-10 quarters.
- The company aims to reduce costs by Rs 2,000 crore over the next two years.
On Aug. 9, Jet Airways had deferred its financial results’ announcement as the audit committee didn’t recommend approval “pending closure of certain matters”. Earlier this month, the Economic Times had reported unnamed people that the company told its employees that won’t be able to operate for over 60 days without cutting expenses, including salaries.
Goyal had apologised to investors earlier this month as the airlines shares plummeted. “Lots of shareholders have lost money, I feel guilty and embarrassed,” Goyal had said. The airline has been the least preferred aviation bet among investors, with the stock declining over 66 percent in the year so far. Shares of the company closed 2.16 percent higher ahead of its earnings.