New Delhi, May 27, 2018: 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 FY 18 loss of Rs 1,040 crore as opposed to a profit of Rs 583 crore in same quarter of previous fiscal. For FY 2017-18, Jet reported a loss of 636 crore versus a profit of Rs 1,499 crore in FY 17.
Results of the two other listed airlines had also shown similar stress due to the worsening oil-rupee combine. IndiGo’s Q4 FY 18 net profit had fallen 73% from a year ago from Rs 440 crore to Rs 117.6 crore. 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 FY 2017-18 was Rs 2,242.4 crore, up 35% from Rs 1,659.2 crore in FY 2016-17.
SpiceJet had said that its bottomline was impacted by Rs 81.4 crore in the quarter ended March, 2018, due to the 12.7% hike in crude oil 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 FY 2017-18 was Rs 557.2 crore, up from Rs 427.2 crore in FY 17 according to aviationindia.net.
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.”