The domestic private carrier Jet Airways reported a slump of 91% in the standalone net profit for the July-September quarter of the financial year 2017-2018. Following the massive plunge in the Q2 net profit, the stock of Jet Airways shed as much as 4.5% in the early morning trade today. Shares of Jet Airways opened 3.99% lower at Rs 668.9 and quickly extended losses, fell 4.55% to hit the day’s low of Rs 665 on BSE. The stock of Jet Airways fell 4.61% and made a day’s low of Rs 664.65 on NSE. Amid the heavy trading volumes, more than 26 lakh shares of Jet Airways exchanged hands on both BSE and NSE, as at 9.53 am. We take a look at 4 reasons why Jet Airways standalone net profit tanked 91%.
Plunge in other income
The standalone net profit of Jet Airways for the quarter ended 30 September declined 91% to Rs 49.63 crore from Rs 549.02 in the same period a year earlier. The total sales saw a marginal decline of 0.25% to Rs 5,758.18 crore in the July-September quarter as against Rs 5,772.79 crore in the corresponding quarter in the previous fiscal. The private carrier Jet Airways witnessed a major drop in the other income, which implies the non-aeronautical revenue. It dived 59% to Rs 131.57 crore in the same quarter under review from Rs 319.58 crore in the year-ago period.
Rise in fuel expenses
Jet Airways net profit was beaten down majorly due to the surge in the aircraft fuel expenses. In the regulatory filing, it showed that aircraft fuel expenses rose about 16.7% in the July-September period to Rs 1,525.66 crore from Rs 1,307.36 crore.
Low demand in Gulf
“The weak demand in the Gulf continues while low fares, as well as yields in the domestic market, have limited the ability to offset the increase in fuel prices,” PTI reported quoting Jet Airways Chief Executive Officer Vinay Dube.
Zero income from sales
The Mumbai based aircraft carrier Jet Airways attributed the decline in other income to nil sales from the share of profit and no income from the sale and leaseback of aircraft in the reporting quarter.