Jet Air slumps to Rs225 crore loss in Q1
25 July 2009
Jet Airways, the country's second-largest private carrier by market share, has posted a net loss of Rs225.3 crore in the first quarter, compared to a profit of Rs143.4 crore during the same period last year, following intense competition, lower yields and overcapacity in the market.
Jet's net sales declined 26 per cent to Rs2,085 crore during the quarter from Rs2,830 crore for the same quarter last fiscal. The economic downturn has adversely impacted the top line, which fell 16.24 per cent to Rs2,428.4 crore during the quarter ended June.
Though higher fuel costs, depreciation and interest have taken their toll, the company managed to cut expenditure by 7.8 per cent to Rs2,163.8 crore. The interest cost has shot up 81 per cent to Rs243.6 crore because of Rs14,500 crore debt in the books.
For reducing the debt burden, the company's board has approved plans to raise $400 million (approximately Rs2,000 crore) through equity dilution. Jet Airways has a cash and cash equivalent of Rs800-900 crore in its books.
The drop in passenger numbers, especially corporate traffic, and competition among airlines to reduce fares to attract passengers led to a decline in average yields.
To control costs, the airline has taken initiatives such as network restructuring, rationalising personnel costs, restructuring of aircraft leases, debt restructuring, cash conservation, maximising Jet Lite-Jet Airways' synergies, intensifying alliances and deferment of aircraft deliveries, the company said in a statement.