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Jet Airways posts huge quarterly loss
Airways (India) Ltd., the nation's largest domestic carrier, posted its biggest quarterly loss in more than three years after jet fuel expenses surged.
- Bloomberg
- Published: 23:33 October 25, 2008
New Delhi: Jet Airways (India) Ltd., the nation's largest domestic carrier, posted its biggest quarterly loss in more than three years after jet fuel expenses surged.
The loss of Rs3.85 billion (Dh284 million) for the three months ending on September 30 compared with a profit of Rs283.6 million a year earlier, the Mumbai-based airline said in a statement to the Bombay Stock Exchange on Friday. Revenue rose 45 per cent to Rs32.6 billion.
The company's spending on fuel, its biggest expense, more than doubled after local oil refiners increased the price of kerosene. Jet Airways Chairman Naresh Goyal forged a partnership with rival Kingfisher Airlines Ltd. this month to cut expenses to offset below-cost fares, higher expenses and an economic slowdown that reduced demand for air travel.
"Aviation is worse off now because everybody is cutting down on travel," said Jayesh Shroff, who helps manage the equivalent of about $2.5 billion in equities at SBI Asset Management Co. in Mumbai.
"Getting back to profits is definitely not going to happen so soon."
Indian oil refiners have raised the price of jet fuel 24 per cent since the start of the year in Jet Airways's base of Mumbai, inflating expenses for the airline.
The average price of jet fuel rose 69 per cent in the quarter to Rs67.18 a litre. The carrier spent Rs16.9 billion buying jet fuel in the period, compared with Rs6.96 billion a year ago.
Industry in trouble
Higher operating costs because of a pilot-shortage, insufficient infrastructure and more competition may lead India's airline industry to a record $2 billion loss this year, according to the Centre for Asia Pacific Aviation. The industry's loss will be the worst in the world outside the US, according to the International Air Transport Association.
"The impending recession globally has also impacted travel patterns to a very large extent and we expect a slowdown in demand growth over the next few quarters," Jet Airways said in a statement.
"We have deferred our expansion plans and are postponing our aircraft deliveries by at least a year."
Jet Airways carried 2.83 million passengers in the last quarter, 7.6 per cent more than a year earlier.
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