Jet Airways stock rises after airline reports Rs 1,261 crore loss in Q2

The Jet Airways stock rose in early trade today after the airline reported Rs 1,261-crore loss for the quarter ended September. However, net loss narrowed from Rs 1,323 crore loss reported in the first quarter of the current fiscal. Brent crude price falling back below $70 per barrel to $69.12 per barrel also supported sentiment for the stock.

The stock rose up to 3.34% to 250.15 compared to the previous close of 242.05 on the BSE. It opened at a loss of 5.80% at 228 on the BSE.

The small cap stock has lost 65.17% during the last one year and fallen 70.32% since the beginning of this year. However, the stock has delivered 21.88% returns during the last one month.  The stock is trading above its 50 day moving average of 210.87 but lower than its 200 day moving average of 321.72 level.

The stock recorded volume of 3,81,181 shares traded on the BSE compared to the average three month volume of  7,27,410 and average 10 day volume of 8,44,400 .

The stock hit a 52 week high of 883.65 on January 5, 2018 and 52 week low of 163 on October 1, 2018.

Higher fuel costs that soared 59 percent, and a steep rupee fall that led to a sevenfold spike in forex losses resulted in Rs 1,261 crore net loss for the airline in the second quarter. It had posted a net profit of Rs 71 crore in the same period last fiscal.

The cash-strapped airline, which is reportedly looking for investors tide over the liquidity crisis, said its fuel bill jumped 58.6 percent to Rs 2,419.76 crore during the quarter. In the year-ago period, it had spent Rs 1,525.66 crore in fuel cost.

Another crippling factor was the forex loss, which jumped more than six-times to Rs 416.69 crore from Rs 72.99 crore in the year-ago period.

However, the airline reported a 9.50% rise in net sales to Rs 6,161.15 crore in Q2 compared to Rs 5,626.61 crore sales in the corresponding quarter of the previous fiscal. Net sales in Q1 of the current fiscal stood at Rs 6,010. 46 crore.

The management sounded confident of surviving the crisis, underlining the massive cost-saving plans underway.

“With our clearly defined focus on profitability, we are in the midst of turning the ship around and are closely engaged with all our partners to navigate the challenges posed by the current industry environment,” chief executive Vinay Dube said.

Despite these forex and fuel bill losses in Q2, the airline registered a 7.3 percent growth in capacity or available seat kilometres (ASKMs) during the quarter while the revenue passenger kilometers (RPKMs) or passenger volume grew 10.5 percent, flying 7.45 million, which was 2.2 percent more than the comparable numbers in the year-ago period, the airline said.

Meanwhile, the airline has decided to cut flights on less profitable routes and add capacity to more lucrative markets, as part of its effort to lower costs and boost revenues as it struggles to stay aloft.

“The airline has embarked on a comprehensive review … The measures will include rationalisation of operations on select, uneconomic routes,” Jet said in a statement, adding that it will redeploy planes to more productive domestic and international sectors.