Jet posts Rs 713.60 cr loss for Q2 on rising fuel cost

NEW DELHI: Premier private carrier Jet Airways today blamed rising fuel costs and predatory pricing by competitors as factors for its Rs 713.60 crore loss in the second quarter of 2011-12 and said if the "stupid pricing" continues it will be difficult to sustain.

"Q2 has been worst because of low traffic and factors like high fuel prices, depreciating rupee and predatory pricing. Lowering of fare could not have got us revenue. Low- pricing regime as led us to where we are," Jet Airways Chief Commercial Officer Sudheer Raghavan told financial experts while analysing the latest financial results.

The domestic market was price sensitive and airlines have been resorting to "stupid pricing to show increased market share", he said in reply to questions.

"We also see no reason why any predatory pricing should be condoned. If this continues, we will not be able to hold back," Raghavan said.

Even though fuel price has recently risen phenomenally, the airline has not passed it on to the fliers, he claimed.

Jet Airways' net loss in the September quarter of 2011-12 widened to Rs 713.60 crore from Rs 123.16 crore in the April- June quarter. The airline had a net profit of Rs 12.40 crore in the corresponding period in 2010-11.

Raghavan, however, exuded confidence that the second half of the fiscal would be better for the airline.

Regarding impact of depreciating rupee on the company's debt, he said, "We have a total debt of Rs 8,500 crore. Of which Rs 8,000 crore is in dollars and the remaining in rupee. That has increased to about Rs 1,000 crore completely on account of rupee depreciation."

On its view on the much-talked about Government move to allow foreign carriers to pick up stake in Indian airlines, Raghavan said, "We are neutral to whatever the government of India decides."

Jet Airways and other members of the Federation of Indian Airlines have so far been opposing allowing foreign airlines to invest in Indian carriers.

He further said that the aviation sector has a great potential to grow provided the government takes care of issues like sales tax of aviation turbine fuel.