Oct. 23--MUMBAI -- Jet Airways (India) Ltd reported a record quarterly loss of Rs.891.01 crore in the three months ended 30 September after it was buffeted by a steep fall in the value of the local currency, poor demand and intense competition that led to pricing pressure.
This is the third straight quarterly loss for the country's second-largest airline by passengers carried.
The fiscal second quarter is traditionally a lean period for airlines because of the monsoon and the third and fourth quarters are the strongest because of festivals and holidays.
The company, in which Etihad Airways PJSC will acquire a 24% stake, reported a loss of Rs.891.01 crore compared with a net loss of Rs.99.67 crore in the year-ago period, it said on Wednesday.
Net sales rose 1.38% to Rs.4,194.70 crore from Rs.4,137.63 crore.
A survey of analysts by Bloomberg had pegged the loss at Rs.437 crore on a net sales of Rs.4,203.50 crore.
This is the most the airline has lost in a quarter. In the quarter ended 30 September 2011, it lost Rs.713.60 crore.
The consolidated loss of Jet Airways is Rs.998.51 crore as its low-fare airline unit JetLite has lost Rs.107.5 crore in the September quarter against a Rs.66.3 crore loss a year ago.
Jet Airways said the lean season and an economic slowdown resulted in drop in yields. "Depreciating currency, high fuel prices and increases in airport charges in select Indian airports have driven cost pressures resulting into losses," it said.
Jet Airways and Etihad Airways, the national airline of the United Arab Emirates, are awaiting the final approval of their deal from India's anti-trust regulator, the Competition Commission of India.
Early this month, India's cabinet cleared the Rs.2,058 crore deal, involving the first investment by a foreign airline in an Indian one since the government eased ownership rules for foreign airlines.
In April, Etihad agreed to buy a 24% stake in Jet Airways after the government relaxed rules in September 2012 to allow foreign airlines to own as much as 49% of local airlines.
Jet Airways and the other listed airline SpiceJet Ltd, may post record losses in the quarter ended September and, together, India's five functioning airlines may have lost as much as $500 million in the period, consulting firm Capa said in a report issued Tuesday, blaming it on "irrational pricing".
Airlines dropped fares for tickets booked even for immediate travel in what is considered a lean travel quarter. Typically, fares are cheaper if booked in advance and become more expensive closer to the date of travel.
"Indian airlines have unfortunately repeatedly demonstrated their ability to undo months of hard work with just a few weeks of irrational pricing as a result of which profitability remains elusive," Capa said in its report.
"Every airline in India is estimated to have been in the red during the quarter. Among private carriers Jet Airways is estimated to have posted the highest loss at close to $150 million, followed by SpiceJet at $70-80 million. In both cases, the estimates exclude one-time adjustments. Other carriers such as IndiGo and GoAir also incurred heavy losses," according to the Capa report.
Capa said one or two such quarters could put a question mark on the viability of some airlines.
Shares of Jet Airways dropped marginally by 0.43% to close at Rs.346.05 per share on Wednesday on BSE, while the benchmark index, Sensex dropped 0.47% to close at 20,767.88 points.
The earnings were announced after market hours.
There were instances of aircraft on ground, the impact of which was approximately Rs.123.3 crore. These aircraft will be leased out in the next few months.
"Indian aviation industry witnessed increasing cost challenges, mainly due to rupee depreciation against the dollar, high fuel prices and increase in airport charges in certain stations putting pressure on the bottom line," Jet Airways chief executive officer Gary Toomey said.
"In the current scenario, Jet Airways has managed to remain competitive through series of planned steps, such as discontinuing loss making routes and stringent cost control measures," Toomey said. "The ongoing initiatives will augment well for the airline's performance in the quarters to come."
In its outlook statement, Jet Airways said third-quarter results will reflect high seasonality, which will help to improve yields.
Copyright 2013 - Mint, New Delhi
