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NEW DELHI: Rising jet fuel prices, a weakening rupee and inability to charge fares reflecting higher costs due to intense competition have begun taking a toll on the health of Indian carriers. Jet Airways Group on Wednesday declared Q4, FY18 loss of Rs 1,040 crore as opposed to a profit of Rs 583 crore in same quarter of previous fiscal. For 2017-18, Jet reported a loss of Rs 636 crore against a profit of Rs 1,499 crore in 2016-17. Jet Group’s total revenue rose 8% to Rs 24,511 crore in FY18 compared to Rs 22,693 crore in FY17.
SpiceJet had said that its bottomline was impacted by Rs 81.4 crore in the quarter ended March, 2018, due to 12.7% hike in crude prices. The budget carrier saw its Q4 profit rise 10.8% to Rs 46.1 crore due to record load factors. SpiceJet’s consolidated net profit was Rs 557.2 crore in 2017-18, up from Rs 427.2 crore in 2016-17.
Among listed carriers, Jet has seen maximum impact of the deteriorating oil-rupee factors. Jet’s CEO Vinay Dube said, “Financial performance during the quarter was weaker due to the continuing increase in the price of Brent fuel without a corresponding increase in air fares, as well as mark-to-market adjustments due to a weaker rupee.” The auditor’s report along with Jet’s result said, “The appropriateness of assumption of going concern is dependent upon realization of various initiatives undertaken by the holding company and/or the holding company’s ability to raise requisite finance/generate cash flows in future to meet its obligations, including financial support to its subsidiary companies.”
Jet said the “year-on-year impact of increase in fuel prices of Rs 366 crore… adjustment due to weaker rupee of Rs 156 crore in Q4, FY18 vs gain of Rs 54 crore gain in fourth quarter of FY17 and onetime maintenance charge of Rs 253 crore.”
Jet chairman Naresh Goyal’s note with the result said: “The company has incurred a loss during the year and has negative net worth as on March 31, 2018, that may create uncertainties. However, various Initiatives undertaken by the company in relation to saving cost, optimize revenue management opportunities and enhance ancillary revenues is expected to result in improved operating performance. Further, our continued thrust to improve operational efficiency and initiatives to raise funds are expected to result in sustainable cash flows addressing any uncertainties. Accordingly, the statement of financial results continues to be prepared on a going concern basis, which contemplates realization of assets and settlement of liabilities in the normal course of business, including financial support to its subsidiaries.”
Results of the two other listed airlines had also shown similar stress due to the worsening oil-rupee combine. IndiGo’s net profit had fallen 73% in Q4, FY18 to Rs 117.6 crore from Rs 440 crore in corresponding period last fiscal. IndiGo’s fuel cost during the January-March, 2018, quarter had risen to Rs 2,338 crore from Rs 1,751 crore a year ago. IndiGo’s profit for FY18 was Rs 2,242.4 crore, up 35% from Rs 1,659.2 crore in FY17.
SpiceJet had said that its bottomline was impacted by Rs 81.4 crore in the quarter ended March, 2018, due to 12.7% hike in crude prices. The budget carrier saw its Q4 profit rise 10.8% to Rs 46.1 crore due to record load factors. SpiceJet’s consolidated net profit was Rs 557.2 crore in 2017-18, up from Rs 427.2 crore in 2016-17.
Among listed carriers, Jet has seen maximum impact of the deteriorating oil-rupee factors. Jet’s CEO Vinay Dube said, “Financial performance during the quarter was weaker due to the continuing increase in the price of Brent fuel without a corresponding increase in air fares, as well as mark-to-market adjustments due to a weaker rupee.” The auditor’s report along with Jet’s result said, “The appropriateness of assumption of going concern is dependent upon realization of various initiatives undertaken by the holding company and/or the holding company’s ability to raise requisite finance/generate cash flows in future to meet its obligations, including financial support to its subsidiary companies.”
Jet said the “year-on-year impact of increase in fuel prices of Rs 366 crore… adjustment due to weaker rupee of Rs 156 crore in Q4, FY18 vs gain of Rs 54 crore gain in fourth quarter of FY17 and onetime maintenance charge of Rs 253 crore.”
Jet chairman Naresh Goyal’s note with the result said: “The company has incurred a loss during the year and has negative net worth as on March 31, 2018, that may create uncertainties. However, various Initiatives undertaken by the company in relation to saving cost, optimize revenue management opportunities and enhance ancillary revenues is expected to result in improved operating performance. Further, our continued thrust to improve operational efficiency and initiatives to raise funds are expected to result in sustainable cash flows addressing any uncertainties. Accordingly, the statement of financial results continues to be prepared on a going concern basis, which contemplates realization of assets and settlement of liabilities in the normal course of business, including financial support to its subsidiaries.”
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