The Hindu Business Line : Costlier fuel, new hires dent Jet Airways

Mumbai, Jan. 28 High fuel costs and start-up losses on its recently launched international routes have led Jet Airways to incur a net loss of Rs 91 crore in the third quarter ended December 31, 2007.

This is against a net profit of Rs 40 crore in the same period last year.

However, the company’s total income for the quarter grew by 23.9 per cent to Rs 2,517 crore (Rs 2,030 crore).

Commenting on the results, the Jet Airways CEO, Mr W. Prock-Schauer, said, “Aviation turbine fuel was at a record high of $100 a barrel in November. At the company level, the average staff numbers increased from 9,780 to 11,910 on account of the expansion of our international operations. New hires among pilots, engineers and cabin crew constituted the bulk of this increase.”

Among other coordinates, the domestic operations accounted for 63 per cent of the operating revenues at Rs 1,539 crore as against 79 per cent last year, reflecting the company’s growing scale and contributions from its international operations. International operations contributed 37 per cent to revenues this quarter, at Rs 886 crore.

Fuel impact

According to an aviation analyst, Jet would continue to incur losses in the next quarter too, mainly because of high fuel costs. Given the expansion plans of the airline, the start-up losses are likely to delay profitability further, the analyst said.

Mr Prock-Schauer had a contrary view; he said that going forward the “outlook is positive”. “We have a 70 per cent domestic load factor already for the month of January despite a lean period. And we have enough forward bookings on our international routes as well.”

Jet Airways will consider raising $800 million, the company told the BSE in a separate statement. This amount will include its pending rights issue of $400 million.