Jet Airways beats street as Q2 loss narrows sharply
MUMBAI (Reuters) - Jet Airways India Ltd(JET.NS), India's biggest airline, beat estimates with a 86 percent cut in its second-quarter losses thanks to a jump in operating income, sending its shares as much as 5.5 percent higher.
Jet, which posted its first quarterly profit in 18 months last quarter, has benefited from a shutdown at rival Kingfisher Airlines(KING.NS) which has eased over capacity and allowed other airlines to increase their fares in India's competitive airline industry.
India's airlines have suffered from high fuel costs, below-cost fares in a highly competitive market and tough regulations in one of the fastest growing markets in the world.
"Improvement in yields has helped the group to post an operating profit," Nikos Kardassis, chief executive officer, said in a statement. "However, lean season, slowdown in industry passenger traffic due to weakened economic scenario, high fuel prices coupled with high rupee depreciation versus the dollar has pulled the overall results down."
Kingfisher, saddled with $1.4 billion in debt, has not flown since October 1. It had been steadily cutting flights for the past year, driving passengers to carriers such as Jet, SpiceJet and privately held Indigo.
Jet said its EBITDAR (earnings before interest, tax, depreciation, amortisation and aircraft rent) margin at its domestic operations was 9.3 percent, against a negative margin of 8.1 percent in the year-ago quarter.
The airline will continue its drive to discontinue loss-making routes and add capacity to performing sectors, it said in a statement on Friday.
Jet said its net loss for the quarter to end-September was 997 million rupees, down from 7.14 billion the previous year, thanks to a 26 percent jump in income from operations. Expectations were for a net loss of about 2.7 billion rupees, traders told Reuters.
Shares in the airline, valued at $563 million by the market, closed up 3.1 percent on a Mumbai market that ended 1 percent higher.
(Reporting by Henry Foy; Editing by Robert Birsel)
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