Sale of frequent flyer programme, sale and leaseback of aircraft help it post a Rs 70 crore standalone net profit
Naresh Goyal led-Jet Airways on Friday beat expectations as its reported a profit to Rs 70 crore for the quarter ended September compared with a loss of Rs 891 crore in the same period last year.
This is the first quarterly profit posted by the airline after six consecutive quarters, driven by a one-off gain from sale of its frequent flyer business and sale and leaseback of aircraft. The company has not reported annual profit since 2008.
On a consolidated basis, including Jet Lite, the airline managed to cut loss to Rs 43 crore in the second quarter, compared with a loss of Rs 999 crore a year ago.
Total passenger revenues went up 13.9% to Rs 4,277 crore in the second quarter from Rs 3,753 crore a year ago for the entire group including JetLite.
The airline got around Rs 470 crore from sale of Jet Privilege Frequent Flyer programme and sale and leaseback of aircraft.
It got a surplus of Rs 305.01 crore from the sale of the frequent flyer programme.
The airline, which is aiming for a turnaround by 2017, however, continued to lose money during the quarter. Excluding the one-off gain, the airline lost Rs 235 crore during the quarter.
"The combined passenger load factor increased by 1.2% from 77.4 to 78.6 as the airline gained new customers. Yield was up by a strong 6.4%, as the business plan to reshape the airline, and the benefits of the partnership with Etihad Airways took hold," the airline said.
Despite the losses, analysts said the airline's performance was ahead of expectations.
"Jet's performance was far ahead of expectations on account of improved domestic operations and higher revenues from international operations. The fact that it managed to close down its loss making domestic routes has worked well for airline's financials," said an analyst who did not wish to be quoted.
It is betting on cost cuts and the launch of more international routes to return to profits by 2017.
Cramer Ball, CEO of Jet Airways, said in a statement, "The operational restructuring initiatives with route and network rationalisation are already yielding dividends on the domestic and international network. The organic network expansion, coupled with enhanced global connectivity through alliances and codeshares, has also helped increase international passenger traffic. All of which makes me confident that our move to a single brand by December will help provide our guests with exceptional value and a significantly enhanced and consistent product offering."
"In our commitment to improve our customers experience, the Jet Privilege Programme has been enhanced by the introduction of a new mileage accrual and reward structure as well as new strategic partnership that will add value and strengthen the travel experience for our Jet Privilege members," he said.
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