The Hindu Business Line : Jet Airways suffers loss on higher fuel costs

Jet impact
The company's overall financial performance impacted by continuing yield pressure in domestic and international operations
Fare discounting is a cause for concern
Personnel costs have gone up due to the induction of high-salaried staff

Mumbai , July 29

Jet Airways has reported a net loss of Rs 45 crore for the first quarter ended June 30, 2006, citing pre-tax losses on its start-up international operations and increase in fuel and other input costs. Since its listing in March 2005, this is the first time the company has reported losses. The company had reported a net profit of Rs 95 crore in first quarter of the previous fiscal.

Financial Performance

Net income for the quarter under consideration rose 25.6 per cent to Rs 1,647 crore (Rs 1,311 crore). Total expenditure was higher by 54 per cent at Rs 1,585 crore (Rs 1,031 crore).

The overall financial performance in the quarter was impacted by factors including continuing yield pressure in domestic and international operations and an increase in fuel and other input costs, said a statement from the company. Employee remuneration and benefits rose 106 per cent to Rs 229 crore, while and fuel expenses rose by 68 per cent to Rs 585 crore.

Operating costs were higher by 54.5 per cent at Rs 564 crore (Rs 365 crore).

International operations logged a pre-tax loss of Rs 71.3 crore, overwhelming the profits of the company's domestic operations that stood at Rs 11.8 crore. The airline carried 25 per cent more passengers during the samequarter.

However, domestic passenger yield (average revenue per passenger) for the period was nine per cent lower than the figures of the year-ago quarter. Interest costs for the period rose marginally to Rs 64 crore (Rs 60 crore).

Rising fuel cost is becoming a cause for concern for the airliner, said the statement.

While the industry had reported a 52 per cent rise in domestic passenger numbers for the period, this induced by fare discounting, another cause for concern, the statement said.

"Personnel costs, too, have risen due to the induction of high-salaried staff," it said.

Shares of Jet Airways closed at Rs 513.50, up by Rs 6.50 or 1.28 per cent on the BSE on Friday.

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