Jet Airways, in which Abu Dhabi’s Etihad Airways is acquiring a 24 per cent stake for $380 million, posted a net loss of Rs 355 crore for the first quarter ended June 30, 2013. The airline had posted a net profit of about Rs 25 crore in the corresponding period last year.
In a quarter which is considered to be strong for the domestic carriers, the airline’s loss was a result of rupee depreciation, steep increases in airport charges at key metros and high fuel prices.
Total income from operations dropped to Rs 4,005 crore in the April-June quarter from Rs 4,587 crore in the year-ago period. Aircraft lease rentals went up in the first quarter to Rs 363 crore from Rs 275 crore in the corresponding period last year.
However, jet fuel costs dropped to Rs 1,543 crore in the quarter from Rs 1,967 crore in the year-ago period. Foreign exchange translation losses amounted to Rs 131.5 crore for the quarter.
The airline company said increases in payroll costs due to increments paid in March 2013 which amounts to Rs 24 crore impacted the numbers for this quarter.
‘a turbulent time’
Capt. Hameed Ali, acting CEO, Jet Airways, said, “The depreciation of rupee versus US dollar, steep increase in landing and navigation charges at key metros and high fuel prices has impacted the industry’s profitability. The domestic aviation industry continues to go through a turbulent time due to weak economic scenario resulting in a sluggish demand growth. This coupled with airline’s inability to pass on high input costs fully to the passengers, have caused financial strain on airlines.”
The company expects the proposed equity infusion by Etihad Airways to “significantly change” the landscape of the business and reduce costs due to better bargaining ability as well as higher revenues.
The shares of Jet Airways closed at Rs 325.60, up 0.59 per cent, on the BSE on Thursday.