Jet flies back into profit, nets Rs 28 cr

MUMBAI: In a turnaround aided by higher sales, India’s largest airline by marketshare, Jet Airways, on Monday reported a profit after tax of Rs 28 crore for the June-September ’07 quarter compared to a loss of Rs 55 crore in the same period last year. About 30% of the airline’s revenue now comes from international operations.

Net sales grew 26% to Rs 1,818 crore. However, Jet’s yields, a measure of margins earned in the airline industry, continued to be under pressure from capacity addition and were down 4% compared with last year.Profitability was also aided by the sale and lease back of four planes in the current quarter versus three in the quarter ended September 2006.

Meanwhile, JetLite, the airline’s low-cost subsidiary lost Rs 192 crore in the first half of the year. The airline, that was acquired from the Sahara group earlier this year, had posted a loss of Rs 690 crore in financial year 2006-7. Speaking to ET on the prospects for JetLite, the Jet Airways CEO Wolfgang Prock Schaeur said, 20 of the airline’s 24 planes are operating.

The carrier is expected to come back to profitability in the second half of the year. Jet Airways had loaned about Rs 400 crore to JetLite for its working capital expenses, which have now been repaid. JetLite has raised a similar amount from IDFC.

Meanwhile, Jet Airways plans to go ahead with its rights issue to raise $400 million early next year. In the coming months it plans to start operations from its base in Mumbai to Dhaka as well as Shanghai. It also plans to begin operations to the Gulf countries early next year. Flights on the ASEAN routes will be upgraded to higher capacity A330 aircraft compared to the current Boeing 737s, Mr Prock Schaeur said.

Meanwhile, fuel costs were lower by Rs 61 crore versus the same period a year ago; this was largely due to lower rates of fuel and the lower number of flights operated. The average fuel rate was at Rs. 39.79 per litre as compared to Rs. 44.11 a year ago and Rs 38.87 per litre in the preceding quarter.

Jet lost Rs 118 crore on its international routes against a pretax loss of Rs. 111 crore in the same period last year. This was largely on account of the start up of new routes to New York and Toronto. The Jet scrip closed at Rs 922 on the BSE on Monday, about 2% higher than the previous close.