Jet flies back to profit in Q3; higher yields, lower costs help
Mumbai: Jet Airways Group Friday clocked a net profit Rs 85 crore for the third quarter ended December 2012 on the back of higher fares, better yields and cost cutting measures and said it hopes to maintain healthy bottomline in the short-to-medium-term.
Improvement in the yields, decrease in costs has helped improve operating margins for the quarter despite slowdown in traffic growth, higher fuel prices and impact of a weak rupee, the airline said. The airline had reported a net loss of Rs 101.22 crore in the year-ago quarter.
"All of our efforts on revenues, costs and network side have resulted in turning around the operations. This is despite higher fuel prices and rupee fall impact that we had to incur in the last few months. The combined impact of higher yields and lower costs (ex-fuel) resulted in significantly lowering the breakeven seat factor levels in the business," Jet Chief Executive Nikos Kardassis said in a statement.
Kardassis said revenues rose 6.6 percent to Rs 4,251.2 crore, while Ebitdar (Earnings Before Interest Tax Depreciation and Rentals ) soared 281 percent to Rs 865.8 crore, despite higher fuel prices and rupee depreciation, while Ebitdar margin jumped 20.6 percent in the reporting period against 5.8 percent a year ago.
Average gross revenue per passenger or yield rose 18.6 percent, but the seat factor declined to 75.6 percent from 78.6 percent.
The airline, during the quarter, has pulled out of loss making routes, redeployed aircraft to other profitable routes, which helped in improving overall international performance.
The capacity induction in the market has slowed down over the past few months, which has helped maintain higher yields.
The Naresh Goyal-owned company, which is close to inking a 24 percent stake deal with the UAE carrier Etihad, said income from operations rose to Rs 4,205.77 crore in the reporting quarter from Rs 3,939.16 crore year-ago.
It also said that but for a Rs 48 crore knock-down due to forex loss during the quarter, the profitability would have been better.
The airline continued with the measures on cost cutting besides exploring various ancillary revenues and process improvements across all segments of the business, Kardassis said.
"These measures will help us is future also," he said, adding fuel prices and rupee depreciation continues to be a cause of concern in the short-term.
Passenger bookings in the current quarter showed encouraging trends, however it will reflect some seasonality, he said. Sale and lease back transactions and debt reduction programme continue to be on track and opting out of certain international routes have helped in improving overall overseas performance, Kardassis said.
However, this resulted in some of the aircraft getting grounded in the short term, the impact of which for the quarter was around Rs 55 crore. These aircraft will be redeployed soon, he added.