Jet Airways had hard landing in Q1 with Rs 355 cr loss

Moneycontrol Bureau

Private carrier Jet Airways has swung into Rs 355 crore loss in June quarter on higher forex loss and poor margins While forex loss rose 11 percent year-on-year to Rs 763 crore, margins fell to 2.4 percent from over ten percent.

The carrier had reported Rs 24.7 crore profit in corresponding quarter of last year.

Sales also declined around 13 percent to Rs 4005 crore Y-o-Y.

Here are factors which hurt Jet Air during the quarter.

Due to pay hikes in March, expense went up by Rs 23 crore which did not reflect in the year-ago period numbers

Cancellation of certain long haul flights in Q2 and Q3 of FY13 meant that there were instances of aircraft on ground during the quarter. The impact of this was Rs 1,22.8 crore.

Due to steep depreciation of the rupee, airport charges at key airports also increased.

If not for these factors, the airline would have reported better numbers, said the airline in a statement.

Going forward
The company expects industry capacity growth to be very modest and this will result in overall yields and seat factors remaining stable for the rest of the year. However, international business continues to be strong with high seat factors. It will also reflect high seasonality, said Jet Air in a statement.

 A consistently falling rupee resulting in higher fuel price along with increase in airport charges are an area of concern. Also, a weak economic environment could affect operating results in short term.

Passing on high operating cost to the passengers fully in short term may not be possible, especially because the current quarter is the weakest in terms of seasonality.

The airline said, it is constantly working toward bringing down operating cost by improving aircraft utilization, replacing high cost debt and achieving synergies in terms of network.

Jet Airways shares declined marginally to Rs 322.70 post numbers announcement.

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