Jet Airways net dives 44% to Rs 126 cr amid stiff competition

Total revenue dropped to Rs 5,406 crore in the first quarter of the current financial year from Rs 5,508 crore in the same period a year ago

Bogged down by competitive pressure and lower revenues, Jet Airways today saw its consolidated net profit fall 44 per cent to Rs 126 crore (Rs 1.26 billion) in the three months to June.

The second largest airline by market share had a net profit of Rs 226 crore (Rs 2.26 billion) in the year-ago period.

Total revenue dropped to Rs 5,406 crore (Rs 54.06 billion) in the first quarter of the current financial year from Rs 5,508 crore (Rs 55.08 billion) in the same period a year ago, it said in a release.

"Domestic fares continue to see pressure," Jet Airways Acting CEO Amit Agarwal said, attributing the trend to competition and increased capacity in the domestic market.

Impacted by intense competition, the carrier saw its domestic revenue fall 4 per cent while the domestic average fares declined 10 per cent in the latest quarter, he said during post earnings analysts' call.

In the international routes too, average fares dropped 2.5 per cent.

On a standalone basis, the carrier saw its net profit plunge 53 per cent to Rs 103.14 crore. In the year-ago period, the same stood at Rs 221.70 crore (Rs 2.22 billion), as per a BSE filing.

Standalone total income from operations fell to Rs 5,112.02 crore (Rs 51.12 billion) as against Rs 5,220.11 crore (Rs 52.2 billion) in the first quarter of 2015-16.

"Due to the intense competitive environment, industry yields were under pressure in Q1 and the trend is expected to continue in Q2," Jet Airways chairman Naresh Goyal said in the release.

He said the airline has been able to report lower non-fuel cost in spite of weakening of the rupee against US dollar by almost six per cent, among others.

The airline trimmed its overall debt by Rs 358 crore (Rs 3.58 billion) in June quarter, bringing the total net debt to Rs 9,783 crore (Rs 97.83 billion).

Noting that the airline has strengthened its core operations and achieved better capacity utilisation, Goyal said strategic partnership with Etihad Airways continues to strengthen.

"In Q1, codeshare traffic delivered by Etihad Airways and other Etihad Airways partner airlines to Jet Airways grew by 41 per cent," he added.

Overall codeshare traffic rose 13 per cent to 551,859 passengers in the latest June quarter.

Agarwal said wide-body aircraft leased to Etihad have started coming back and the process would be completed by end of this fiscal.

Etihad had leased six Boeing 777-300 ERs from Jet Airways.

Currently, the airline has 117 aircraft fleet that includes Boeing 777-300 ERs and Airbus A330-200/300.

"Jet Airways continues to grow its traffic over the Abu Dhabi gateway, complementing the Etihad Airways network.

Together, we are the largest combined scheduled operator of flights to and from India with a 20 per cent market share," Jet Airways vice chairman James Hogan said.

Photograph: Amit Dave/Reuters