Jet Airways Profit Rises Last Quarter

Better yields and cost cuts helped Jet Airways post a 10.5 per cent increase in net

profit to Rs 58.6 crore in the fourth quarter of 2009-10 over the same period in 2008-09. It has been in the black for a successive quarter, having made a Rs 100 crore net profit in the third one. However, Indias largest airline operator in terms of market share posted an increase in standalone net loss to Rs 467.6 crore in 2009-10 from Rs 402.3 crore in 2008-09. But, the airline sounded bullish on the coming quarters, as the market is looking healthy on rising traffic.

Net income from operations rose 15 per cent to Rs 2,604.9 crore from Rs 2,263.4 crore in the fourth quarter a year earlier. Expenditure for the quarter increased by seven per cent, to Rs 2,594.7 crore. But, for the full financial year, yields were over 14 per cent lower at Rs 9,432 crore, from Rs 11,083 crore in the corresponding earlier period.

Jet Airways and Jet airways konnect together have a market share of 25.9 per cent, according to the Directorate General of Civil Aviations figures.

The airline said the market was looking healthy. Domestic air traffic has seen a reviving trend over the last few months. Airlines have achieved high levels of seat factors, as well as yield growth. Industry traffic grew by 21 per cent in the fourth quarter of 2009-10, as compared with the same quarter in 2008-09, said a statement from it. We are seeing healthy seat factors for April and May 2010. The trends for the next few months look healthy and the capacity situation has been under control for the last few months, added the statement.

The airline is also seeing a revival in demand for the premium class and expects this to continue over the next few quarters. On the international routes, we were able to achieve a seat factor of over 80 per cent for the last few months and are seeing consistent growth in operating margins, said the release. The market and analysts, however, were not very happy with the results. Jets share fell 2.97 per cent on the Bombay Stock Exchange, ending the day at Rs 495.20.

Vijay Nara, an analyst at domestic brokerage Centrum Broking, said: The results are broadly in line with expectations. Operationally, margins have been good, mainly due to higher passenger growth but aircraft fuel expenses have grown 42.49 per cent year-on-year. Nara believes the first quarter of 2010-11 should look even better for Jet, with traffic and yields improving and the price of crude oil expected to reduce in the next fortnight.

Foreign institutional investors reduced their holding in the company by 1.02 per cent, quarter on quarter, while domestic institutional investors have reduced their holding marginally by 0.39 per cent, q-o-q, to 8.56 per cent.

by: Traveler

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