51% hike in fuel costs takes Jet Airways in loss

The country's largest airline Jet Airways on Thursday reported a consolidated loss of Rs 124.5 crore for the fourth quarter ended March 31, on rising fuel cost that soared by a whopping 51 per cent.

The company had posted a profit of Rs 58.6 crore in the corresponding period last financial year.

The loss is despite the airline improving its cost per seat km and implementing strict cost control measures across various areas along with effective route rationalising, the Naresh Goyal-promoted airline said in a statement in Mumbai.

A 14.3 per cent jump in revenue could not offset the 51 per cent spike in fuel cost.

While revenue rose to Rs 3,288 crore in the reporting quarter, fuel cost rose to Rs 1,279.7 crore against Rs 846.3 crore in the fourth quarter of 2009-10, a growth of a full 51 per cent, the airline said.

Accordingly, the weight of fuel cost in the overall cost too rose a full 7 percentage points to 39 per cent in the March quarter, which was just 32 per cent year-on-year.

Going forward, the airline warned that the full impact of the crude shock would only be known in the April-June quarter of the current year.

"The recent dramatic rise in crude price has severely impacted margins and softening in May should help. But the full impact of all the fare increase and surcharge increases will come through only the present quarter," the airline said.

"To the extent, crude price and fares continue to remain higher, it could impact some traffic growth in the short-term, though the medium-term growth outlook remains intact," it added.

However, for the full year, the group has massively narrowed its losses to Rs 85.84 crore from Rs 420 crore in 2009-10 on a total income of Rs 14,737 crore during the year compared to Rs 12,000 crore in the previous financial year, a growth of 20.3 per cent.

"Airlines across the world have been impacted by the rude crude shock lately and Jet is no exception. Though we would have liked to pass through all of the fuel price increases, it was not possible to do that in the short-term," Jet chief executive Nikos Kardassis said.