Mumbai: Jet Airways (India) Ltd’s standalone net profit slumped 69% in the quarter ended December as pricing pressure in the domestic market and weaker overseas operations took their toll on India’s largest full-service airline.
Net profit fell to Rs142.38 crore in the three months from from Rs.467.11 crore a year ago, the Mumbai-based airline said on Friday. Revenue dropped to Rs3,344.62 crore from Rs3,608 crore a year ago.
Jet’s earnings fell short of estimates. The airline had been expected to post a net profit Rs200.80 crore on revenue of Rs5,627.40 crore, based on a Bloomberg analysts’ poll.
Airlines had been expected to post lower profits in the December quarter from a year ago as they sold peak season tickets at a discount to counter the demand-dampening effect of demonetisation. Airlines were unable to command the kind of steep prices they typically do during the peak travel quarter.
InterGlobe Aviation Ltd, which operates India’s biggest budget airline IndiGo, saw its fiscal third-quarter profit drop 25% because of increased fuel costs and lower ticket prices, it said earlier this week.
At Jet, other so-called other operating income during the quarter fell by Rs86 crore to Rs127 crore as revenue earned by leasing aircrafts stopped with some contracts ending at the end of the September quarter and the aircraft returning to the airline’s fleet.
“The deployment of the returned aircraft in Jet’s own fleet doesn’t seem to have generated as much profits as the leased aircraft were generating,” said Mahantesh Sabarad, head of retail research at SBI Caps Securities.
The lower operating income singed earnings despite passenger traffic increasing by 4.1% to 6.79 million during the quarter from 6.52 million a year ago. Lower yields and higher fuel costs , which rose 15.6% to Rs1,428.89 crore from the year ago period, also crimped earnings.
“Excluding fuel the operating costs seems to be well under control,” said Sabarad.
The company’s consolidated revenue (including that of subsidiaries) rose marginally by 1.4% to Rs5,784 crore from the year-ago period. Passenger revenue in the same period rose by 2.4% to Rs4,962 crore from Rs4,845 crore.
“In spite of the continuing downward pressure on yields caused by aggressive capacity addition in the industry as well as weaker international aviation markets, we have achieved positive results through our relentless effort to reduce net debt by almost half a billion dollars in the past two years,” Jet Airways chairman Naresh Goyal said.
The company’s shares lost 1.17% to close at Rs380.85 on the BSE on a day the benchmark Sensex edged up 0.05% to close at 28,240.52 points. The earnings were reported after the markets closed.