Jet Airways slips over 10% on largest ever annual loss of Rs 4129 crore

NEW DELHI: Jet Airways Ltd slipped as much as 10.1 per cent in intraday trade on Wednesday, after the airliner posted its highest-ever annual loss of Rs 4,129 crore-forcing it to adopt tough measures to lower costs and achieve profitability with a three-year business plan.

Jet Airways recorded its highest loss in any quarter due to its provision for diminution/impairment in the value of its investment in subsidiary JetLite, low passenger growth, high capacity, and a firm dollar in relation to the rupee in the March quarter, ET reported.

Jet Airways also announced the appointment of its new CEO, aviation specialist Cramer Ball, after its earlier chief quit in January. Jet's last CEO, Garry Kenneth Toomey, had quit in mid- January, barely seven months after taking charge of the airline.

The carrier posted a net loss of Rs 2,153 crore for the quarter ended March 31, 2014, while its consolidated loss for the full fiscal widened to Rs 4,129 crore. It is the fifth straight quarterly loss for the airline.

Since JetLite had been making losses and has negative net worth, the firm through an independent valuation, booked Rs 700 crore as diminution/impairment of value of its investment, which massively increased its losses to Rs 2,153 crore in the March quarter against a loss of Rs 495 crore in the same quarter last year.

As per the ET report, in the March quarter, aviation turbine fuel prices, on an average, grew by 10.5% to Rs 79,899 per kilolitre. Due to this, fuel expenses rose 15.2% to Rs 1,906 crore on a year-on year basis.

In the March quarter, the rupee fell 14 per cent against the dollar. Since most airlines companies pay lease rentals, maintenance cost and pilot salaries in dollars, total expenditure increased 10 per cent to Rs 5,431 crore.