Jet’s unit costs (for transporting a seat per km) increased 8.7 per cent while its unit revenue (for transporting a seat per km) declined 3.9 per cent.
“The rise in the price of fuel, a depreciating rupee, and a resulting mismatch between high fuel prices and low fares adversely affected the Indian aviation industry, including Jet Airways,” said Chief Executive Officer Vinay Dube in a statement.
Consolidated revenue rose 2 per cent to Rs 63.12 billion; expenses increased 24.7 per cent to Rs 76.38 billion. No exceptional item was reported. Jet’s worst loss was in the January-March quarter of 2014-15, because of write-offs on investment in subsidiary JetLite.
Jet Airways Chairman Naresh Goyal said the board considered infusion of capital and monetisation of the airline’s stake in its loyalty programme for long-term financial health and sustainability.
The loyalty programme, which Jet co-owns with Etihad, has 8.5 million members. It is managed through an associate company, earning revenue of Rs 6.2 billion and a profit of Rs 1.7 billion. Jet owns 49.9 per cent in the loyalty business.
The board also approved a Rs 20-billion cost-saving plan over the next two years that will cover maintenance, sales and distribution, fuel, debt reduction and increased productivity. It said it is also targeting 3-4 per cent growth in unit revenue through initiatives in network, pricing and sales while improving products and services. The airline also said it will lease its ATR fleet for improved profitability.
“Jet’s unit cost is 40 per cent higher than IndiGo’s and 64 per cent higher if we exclude fuel but it only manages to price its average fares 15 per cent higher. The management targets to trim non-fuel cost by 12-15 per cent over two years, but this may not be enough and needs to be managed carefully as service quality and staff morale might be compromised,” said Corrine Png, chief executive officer of Crucial Perspective, a Singapore-based transport research firm.