Jet Airways Group Operating profits up by 244 percent despite higher fuel prices

Published on : Saturday, February 2, 2013

Improvement in yields, decrease in Cost per ASKM ex- fuel has helped to improve operating margins for the quarter. This is despite slowdown in traffic growth, higher fuel prices and impact of a weak rupee as against US dollar. The unrealised exchange loss for the quarter was approximately Rs.480 million for Jet Airways.

The Company has over the last few months pulled out of loss making routes, redeployed aircraft to other profitable routes. Key routes discontinued over the last few months include BOM – JNB, BRU – JFK, MAA – BRU, which helped in improving overall international performance. This also resulted in instances of aircraft on ground in the short term, the impact of which for the quarter was approximately Rs.550 million. These aircraft will be redeployed in the months to come

Mr. Nikos Kardassis, Chief Executive Officer, Jet Airways (I) Ltd said, “All of our efforts on revenues, costs and network side have resulted in turning around the airline operations. This is despite higher fuel prices and rupee depreciation impact that we have had in the last few months. The combined impact of higher yields and lower costs (ex fuel) have resulted in significantly lowering the breakeven seat factor levels in the business.

We continue in our endeavour on cost cutting measures, exploring various avenues of ancillary revenues and process improvements across all segments of the business, which will help us to improve the business further.

At Jet Airways we remain committed to consistently improving our legendary warmth, service, reliability and courtesy delivered by an attentive staff to ensure that we achieve customer delight.”
The capacity induction in the market has slowed down over the last few months, thereby helping the airlines to maintain higher yields. This along with the weak economic scenario has affected the traffic growth in the industry YoY. However, higher yields will help the industry to improve breakevens in short to medium term.  ATF Prices and rupee depreciation vis-a-vis US dollar continues to be a cause of concern in the short term.  Q4 passenger bookings show encouraging trends, however it will reflect some seasonality.see full review

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