Jet Airways recovers from loss, makes profit

Jet Airways, based in Mumbai, India, has posted profits for the third quarter ended December 31, 2009, thanks to the cost-cutting measures, fall in the prices of aviation turbine fuel, growth in air traffic, and higher earnings from leasing aircraft.

This is the airline’s first gain in three quarters.

Jet Airways, India’s biggest airline by passenger numbers as well as the country’s largest private airline, made net profits worth 1.05 billion rupees ($22 million) for the third ended December 31, 2009, compared with a net loss of 2.14 billion rupees in the same period a year ago.

In a statement, the airline said its revenue for the quarter dropped by 4% to about Rs 29 billion.

The company said it continues to carry out steps aimed at controlling costs and increasing revenues – the factors mainly responsible for the better performance for the third quarter. New routes as well as a growth in passenger traffic also contribute to the profits.

Jet Airways said it benefited from a smaller bill for employee salaries (Rs 289.76 crore – down by 20.58%), the lower costs of fuel (Rs 887.86 crore – down by 18.84%), as well as drop in other operating expenses (Rs 701.93 crore, down by 26.04%).

JetLite (formerly Air Sahara), the low-cost unit of Jet Airways, made profits to the tune of Rs 3.90 crore on revenues of Rs 416.40 crore, compared to  a net loss amounting to Rs 22 crore and revenues of Rs 439.70 crore one year ago.

In addition, JetLite could cut core operating losses to Rs 11.40 crore from Rs 129.8 crore.

Passenger traffic of Jet Airways in the third quarter climbed by 30%, compared to the same period a year earlier.

In the quarter ended December 31, 2009, Jet Airways’ domestic air traffic increased by 38%, and international traffic went up by 24% from the same quarter one year ago.

According to Jet Airways’ statement, the trend for the next few months appears healthy and the capacity situation is well under control.

Jet Airways achieved a record seat load factor of 82.5% in the quarter ended December 31, 2009.

Jet Airways, owned by businessman Naresh Goyal, is the biggest privately owned airline in India, with a 27% market share – followed by Kingfisher Airlines, having a market share of 21%.

Using 89 aircraft, Jet Airways operates services to 61 destinations in India and overseas.

Centre for Asia-Pacific Aviation, based in Singapore, had, in December 2009, said in a report that private carriers in India are poised to return to making profits in the next financial year, after a phase of bad loses.

According to the Centre for Asia-Pacific Aviation’s report, aided by India’s recovering economy, private airlines in the country are likely earn combined profits amounting to $250 million-$300 million in the fiscal year that begins in April 2010.

A week ago, Kingfisher Airlines had announced that the carrier had suffered bigger loss in the third quarter ended December 31, 2009, though it achieved record a seat-load factor of 80.2% in the same period.

The net losses of Kingfisher Airlines in the third quarter went up to Rs 4.19 billion rupees ($91 million) from net losses of Rs 4.13 billion rupees in the same quarter one year ago.