Mumbai // Jet Airways yesterday posted a record annual profit, achieving a return to profitability a year ahead of its target, as low oil prices helped to lift the airline’s financial performance.
The airline declared a net profit of 12.1 billion rupees (Dh657.4 million) in the year to the end of March, compared to a loss of almost 21bn rupees in the same period a year earlier.
Etihad Airways bought a 24 per cent stake in Mumbai-based Jet Airways for US$379 million in 2013 after India opened up the aviation sector to allow foreign direct investment of up to 49 per cent by overseas airlines in its carriers.
“Jet Airways has been revitalised as a business in the last two years,” said Naresh Goyal, the chairman of Jet Airways. “Our focused efforts have resulted in significant improvement in operational performance leading to record profitability. The Indian aviation industry is witnessing a growth phase and Jet Airways’ commitment to connect India to the world and vice versa is our contribution to India’s economic growth story.”
Jet set a turnaround plan two years ago aiming to return to profit in the current financial year. “I think the numbers are decent,” said Abhimanyu Sofat, the co-founder of Advisesure, an investment advisory firm in India. “But one needs to be cautious because the oil price has gone above $50 again. Otherwise I see that the demand supply scenario continues to be relatively good for the industry, at least for the next six months to one year perspective.”
The strong performance allowed Jet to reduce its debt by 16.8bn rupees in the last financial year, the airline said.
Etihad and Jet Airways have a combined total of 44,000 seats between Abu Dhabi and India each week. India is Abu Dhabi’s largest source market for tourists. Together they fly about one in five of all international travellers to and from India, a fast-growing air travel market.
“We are very satisfied with the strong operational and financial performance achieved by Jet Airways,” said James Hogan, the vice chairman of Jet Airways and president and chief executive of Etihad Aviation Group.
“The return to profitability is a result of the effective partnership between Jet Airways and Etihad Airways. Between the two airlines, we have been able to provide a compelling option of wider combined network and exceptional guest experience for travellers to and from India.”
Jet achieved its fourth consecutive quarter of profitability in the final quarter of the last financial year, reporting a net profit of 4.26bn rupees compared to a loss of 19.6bn rupees for the same period last year.
But Jet recognised that it needed to work hard to maintain a strong performance.
“The competitive and structural challenges in the Indian aviation market continue to exist,” said Mr Goyal. “In addition, the induction of capacity and the enhanced competitive scenario is creating a constant pressure on yields. We will continue to focus on strengthening our balance sheet to ensure sustainable growth and value addition for our stakeholders.”