Jet Airways narrows Q2 losses to Rs 166 crore, beats estimates

MUMBAI: Jet Airways, the second-largest airline by way of passengers carried, posted a net loss of Rs 166 crore ( Rs 100 crore for Jet Airways and Rs 66 crore for low-cost JetLite) for the second quarter that ended in September, narrowing down it losses from Rs 713 crore for the same quarter last year.

Combined revenues for Jet Airways and JetLite stood at Rs 4,626.6 crore, up by 24.2%, and importantly, operating margin for the current quarter went up 14.6% as against 4% of the same quarter for the previous year, indicating a much better operational efficiency achieved by Jet this quarter.

Jet achieved an EBITDAR (earnings before interest, taxes, depreciation, amortisation and restructuring) of Rs 666.8 crore as against an EBITDAR of Rs 146.6 crore for the corresponding quarter last year.

Aviation analysts and equity analysts had pegged the losses for the airline at Rs 250-300 crore. The shares of Jet Airways rose 3.09% or Rs 10.85 to Rs 361.45 a share, as investors acknowledged the earnings announcement which came during market hours on Friday.

Jet Airways said fuel costs went up 17% y-o-y and this coupled with a decline in passenger numbers (domestic passengers flying on Jet's network came down by 6.6%) and rupee depreciation negatively impacted results.

Overall, analysts said Jet's performance for the quarter was much better than what the street estimated as Jet has been able to keep costs under control and managed yields better. Jet Airways improved its operating profit by Rs 520 crore year-on-year as it pulled flights out of unprofitable routes and started routes that make much better economic sense.

"We have focused on removing loss-making routes, network rationalisation and selectively added routes which made economic sense. The result of these initiatives is quite evident from the improvement in y-o-y operating profit by $98.4 million for Jet Group," said Jet Airways CEO Nikos Kardassis.

Equity analysts also point out that fuel costs have gone up by 2.2% sequentially and that is reflected in the results for the quarter. The impact of the fuel costs has not felt much as Jet was able to pass a percentage of the fuel cost hike to passengers.