INDIA: Jet Airways Announces Record Profit Of US$68.8 million

Jet Airways, the second largest airline in India, announced a stand-alone net profit of US$68.8 million (Rs 467 crore) for the three months to December, a multi-fold growth from US$9.3 million (Rs 63 crore) a year ago, driven by higher traffic and lower fuel costs.

Jet Group’s total revenues for Q3 2016 were US$863 million while passenger revenues for Q3 2016 were US$733.7 million.

For the second-largest airline of India, this is the third consecutive quarter of profits and a record in recent years.

The growth in passengers flown and the increased aircraft utilization led to increase in ASK, which helped in improving both operating and financial performance in the third quarter.

Jet Airways’ fuel expenses dropped by 27% in the Q3 period, its fiscal third quarter. Total income from operations grew by 8% to 54.44 billion rupees aided by a 20% surge in passenger traffic, Jet Airways said in a statement.

Jet Airways CEO Cramer Ball said:

“Our strong operational performance resulting in record profit demonstrates the progress we continue to make in our turnaround plan.”

Jet Airways said the robust numbers further validate its turnaround plan, which was unveiled after its part equity sale to the UAE carrier Etihad in 2013.

Jet Airways Chairman Naresh Goyal told “the record profit to the overall strong financial performance arising from several initiatives undertaken to improve productivity and efficiency”.

Jet Airways group was able to generate higher passenger traffic compared to capacity deployment. Domestic capacity grew by 14.6% in Q3 of FY16 while passenger traffic grew 15%. In the international business, capacity grew by 2.6% while growth in passenger traffic was 5.1%.

An in-depth focus on cost reduction initiatives has resulted in the non-fuel cost per ASK being lowered by 4.6% in Q3 while total cost per ASK was reduced by 15%.

Jet Airways further enhanced its synergies with partners, expanding its codeshare partnership with strategic partner Etihad Airways. Overall codeshare traffic witnessed growth of 28% from 416,816 passengers carried in Q3FY15 to 534,104 passengers in Q3FY16, with codeshare traffic with strategic alliance partner Etihad Airways and its partner airlines growing by 86%. Jet Airways continues to develop synergies with Etihad Airways and other Etihad Airways Partners.

Jet Airways, together with Etihad Airways, now has the largest market share in Indian international traffic.

James Hogan, Vice Chairman Jet Airways and President and Chief Executive Officer, Etihad Airways, said:

“We are very satisfied with the operating and financial performance of Jet Airways that has resulted in record profits. We remain committed to providing solid support and driving further synergies between the two partners.”