31-Jul-2006 9:45 AM
Jet Airways reports Q1 loss
Analysis
Mumbai (XFNews-ASIA) - India's largest private airline Jet Airways announced Saturday it had swung to a first-quarter net loss, hit by cut-throat competition from low-cost rivals, high fuel prices and salary costs.
The carrier posted a net loss of 440 mln rupees for the three months ended June 30, compared with a profit of 950 mln a year earlier.
Total sales rose 24.7 pct to 16.78 bln rupees.
Jet, which has been locked in a fierce battle with low-cost carriers for passengers, said financial performance was hit by such factors as "continued yield pressure" and higher fuel costs.
The airline, which has just over a 30 pct market share, said domestic passenger yield or average revenue per passenger in the first quarter was nine percent lower compared with last year.
It added that the near-term outlook remained difficult despite the continuing growth of domestic and international traffic.
"Jet in recent quarters has faced the pressures of growing competition from low-cost carriers like Air Deccan, Spice Jet and airlines like Kingfisher," said Alok Dalal, an aviation analyst at equity research firm IndiaInfoline.
"Jet has also been hit by rising fuel prices," he said.
In June, Jet's deal to acquire smaller domestic rival Air Sahara for 500 mln usd collapsed amid a row over the price.
The deal would have been the biggest in Indian aviation history and would have given the merged airlines control of about half of the surging Indian market, which has grown on the back of a booming economy and lower fares.
Total sales rose 24.7 pct to 16.78 bln rupees.
Jet, which has been locked in a fierce battle with low-cost carriers for passengers, said financial performance was hit by such factors as "continued yield pressure" and higher fuel costs.
The airline, which has just over a 30 pct market share, said domestic passenger yield or average revenue per passenger in the first quarter was nine percent lower compared with last year.
It added that the near-term outlook remained difficult despite the continuing growth of domestic and international traffic.
"Jet in recent quarters has faced the pressures of growing competition from low-cost carriers like Air Deccan, Spice Jet and airlines like Kingfisher," said Alok Dalal, an aviation analyst at equity research firm IndiaInfoline.
"Jet has also been hit by rising fuel prices," he said.
In June, Jet's deal to acquire smaller domestic rival Air Sahara for 500 mln usd collapsed amid a row over the price.
The deal would have been the biggest in Indian aviation history and would have given the merged airlines control of about half of the surging Indian market, which has grown on the back of a booming economy and lower fares.