India's largest private carrier Jet Airways reported on January 16 its net loss more than doubled in the third quarter from a year earlier, hit by high fuel costs and lower revenues as air traffic fell The company warned the travel market would remain difficult for the next few quarters due to the world-wide economic downturn and said it planned to "rationalise its workforce".
The carrier reported its net loss for the three months to December widened to 2.14 billion rupees (44 million dollars) from a net loss of 911.2 million rupees in the same period a year earlier.
The airline blamed the loss mainly on "high fuel costs and lower load factors resulting in lower revenues than expected". Revenue rose nearly 22 percent to 30.63 billion rupees, the company said in a statement. Last October, Jet formed an alliance with fierce rival Kingfisher Airlines to help both carriers battle slowing passenger growth and high fuel costs that have pushed up fares.
The Jet-Kingfisher alliance involves joint fuel management, ground handling, network rationalisation and crew sharing. Jet said its focus on domestic market consolidation "will continue alongside cost reduction initiatives".
"We have eliminated our highest loss-making routes from the international network and have rightsized our capacities on the North America routes," Jet said.
Jet, which has a fleet of 87 aircraft, currently serves 61 destinations, offering 370 flights daily. "The global recession is set to impact travel with corporate earnings slowing down and companies postponing their growth plans," the company said.
"We expect this phase to continue for the next few quarters," it said.
Jet's low-cost airline, Jet Lite, logged a net loss of 220 million rupees (4.15 million dollars) in the quarter, the company said. India's airline industry expanded rapidly in recent years with about 480 aircraft on delivery through to 2012 as the country underwent an economic boom and passengers turned to air travel from trains.
But higher fares and an economic slowdown have pushed travellers back to India's vast and less expensive train network or cars. India's airline sector posted a combined loss of 938 million dollars in the fiscal year to March 2008 and is expected to log a two billion-dollar loss in the current financial year. The airline gave no details of its plans to "rationalise its workforce".
In October, Jet said it was dismissing 1,900 staff, only to scrap the decision after the company's chairman Naresh Goyal said television images of weeping fired employees were causing him sleepless nights. As part of its cost-control moves, Jet plans to lease out four more B777 aircraft starting in April 2009. In addition, it will phase out three B737 classic aircraft whose leases expire in late 2009. Jet shares rose 1.95 rupees or 1.26 percent to 157.05 in a firmer overall market ahead of the release of the earning figures.