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High passenger loads due to an upsurge in global demand for business and leisure travel led to an 11 per cent increase in Jet Airways' net profit, at Rs 118 crore for the quarter ended December 31, 2010, as against Rs 106 crore in the same quarter last year.
The total income for the third quarter grew to Rs 3,474 crore from Rs 2,886 crore in the corresponding quarter last year .The company's other operating income included Rs 140 crore from the leasing of aircrafts. Domestic operations of Rs 1,579 crore accounted for 45 per cent of total revenues. International operations of Rs 1,936 crore accounted for 55 per cent of the total revenues.
On domestic routes, seat factor grew to 76.9 per cent from 75.4 per cent last year, while on international routes the seat factors have been consistently around 80 per cent, said a statement from the airline. Seat factor is the ratio of used to available capacity in an aircraft.
Better yield
Jet also achieved a yield improvement of 16 per cent in the third quarter over the second quarter, while its low fare arm, JetLite achieved a yield improvement of 11 per cent in the same period. Yield is the revenue an airline earns on each passenger for every kilometre travelled. “This performance is despite higher costs of fuel during the quarter, where the price of fuel went up by 5 per cent as compared to second quarter and by 12 per cent compared to Q3FY10,” said the statement.
The expenditure for the airline stood at Rs 2,816 crore in the quarter under review against Rs 2,338 crore incurred last year. Aircraft fuel expenses, which constitute the highest share in the overall expenditure of an Indian carrier, stood at Rs 1,097 crore, as against Rs 888 crore last year. Employee remuneration and benefits also increased to Rs 335 crore in the quarter under review from Rs 290 crore.
Outlook
Industry traffic grew by 19 per cent in the third quarter, said the statement. “Fourth-quarter passenger bookings show encouraging trends; however, it will reflect seasonality”. The third quarter is traditionally the strongest quarter for the airline industry, after which the travel demand starts declining.
The airline continues to be optimistic about its international operations, and says that with the help of strong hub networks, the routes recently started will be profitable sooner than the earlier routes.
With crude oil prices increasing, Jet says, the impact of “such costs will be passed on to the customer in the short to medium term,” however, it is unlikely to “unduly affect demand growth”. “The demand–supply equation in the domestic market continues to be under control and over time, this will result in improved revenues per departure for the industry,” it said.
Jet Airways share price closed 1.64 per cent down at Rs 503.15 on Wednesday, on the BSE.
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