A Jet Airways flight seen grounded in Mumbai, Maharashtra. (Source: Anirudh Saligrama/BloombergQuint)

Q2 Results: Jet Airways Reports Loss For Third Straight Quarter

Jet Airways reported losses for the third straight quarter as higher crude prices, a weaker rupee and competitive tariffs continued to hurt the carrier.

The airline reported a net standalone loss of Rs 1,297 crore in quarter ended September, according to it's exchange filing. The loss would have been wider if not for the one-off revenue of Rs 111 crore related to an expected refund from a lessor towards maintenance contract.

Jet Airways’ losses for the first six months of financial year 2018-19 now stand at Rs 2,620 crore. That's nearly equivalent to its current market capitalisation of Rs 2,750 crore.

The carrier has lost nearly 70 percent of its market value this year as its shares fell amid a cash crunch triggered by costlier fuel and its inability to pass on higher costs due to competitive fares in the world's fastest growing aviation market. Its shares rose as much as 6.4 percent to Rs 257.80 today after declining 5.8 percent in opening trade.

Passenger growth helped the Naresh Goyal-controlled airline’s revenue to increase 10 percent over the year-ago period to Rs 6,161 crore. But that came at the expense of yields as intense competition restricted its ability to raise fares to recover higher costs. Jet’s yield, which measures average earnings per passenger per kilometre, declined 6 percent to Rs 4.18.

Liabilities Jump

Earnings before interest, tax, depreciation and amortisation and rental cost, a key profitability metric for an airline, was negative Rs 346 crore due to higher foreign exchange losses, maintenance costs and fuel expenses. For an airline company, fuel accounts for a third of the total expenses which are mostly dollar-denominated.

Jet’s fuel cost per available seat kilometre rose 44 percent over the year-ago quarter to Rs 1.65. That's despite higher capacity deployed on international routes that enjoy benefit of lower taxes on jet fuel.

Due to continued losses, Jet’s total liabilities rose 18 percent to Rs 22,671 crore. These include long- and short-term borrowings, trade payables and other financial obligations.

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