The oldest Indian private airline’s attempts to stay airborne aren’t helping much it seems.
On Nov. 12, Jet Airways announced it had posted a standalone net loss of Rs1,297 crore ($178 million) (pdf) for the quarter ended Sept. 30 on revenues of Rs6,236.69 crore. In the year-ago period, the airline had posted a modest standalone net profit of Rs49.63 crore on revenues of Rs5,758.18 crore.
This is Jet’s third consecutive quarterly loss and came despite the full-service carrier cutting down costs in several key areas.
After posting a loss of Rs1,323 crore for the quarter ended June 2018, the company had outlined a plan to turn around its financials, which included reduction of maintenance and selling and distribution expenses, renegotiation of contracts, and productive resource deployment. Jet had also trimmed salaries.
It has saved over Rs500 crore since April 2018 with these steps, Jet said on Nov. 12. Yet, its second-quarter loss was only 2% lower than in April-June 2018.
Global macroeconomic factors have made life extremely difficult for Jet in recent months.
“The tough industry environment in the backdrop of a sharp rise in brent fuel price…a depreciating rupee and a challenging pricing situation in an over-capacitated domestic market, continued to undermine Jet Airways’ performance for the quarter,” the company said in a press release.
In the September quarter, Jet incurred a loss of Rs416.69 crore on account of foreign currency fluctuation. The Indian rupee, Asia’s worst-performing currency, has fallen over 13% against the greenback since January. The airline’s expenditure on “aircraft and engines lease rentals” increased 7% quarter-on-quarter as Indian aviation companies pay aircraft rentals in dollars.
Meanwhile, the price of aviation turbine fuel (ATF) has increased over 26% in India since the beginning of this year, and around 7% since July.
And for these very reasons, Jet is not the only Indian carrier struggling. On Oct. 25, IndiGo, India’s largest airline by market share, posted losses for the first time since its listing three years ago.