NEW DELHI Jet Airways (JET.NS) reported its worst quarterly loss on record, squeezed by high fuel costs and a weaker local currency, as it awaits funds from the agreed sale of a stake to Abu Dhabi's Etihad.
Jet, which has lost money in the past six years, said on Wednesday it was awaiting approvals from some regulators for the Etihad deal, without specifying. The agreement, struck to help Jet break out of a pattern of losses in India's airline business, won the cabinet's approval earlier this month.
An Etihad spokesman declined to comment, when asked if Jet's record quarterly loss would have any impact on the deal.
An economic slowdown meant lower yields, a gauge of the average fare paid per kilometre flown, Mumbai-based Jet said in a statement.
A fall in the value of rupee, the high cost of fuel and an increase in fees at some airports also led to the loss, it added.
The net loss for Jet, India's second-biggest carrier by domestic market share, was 8.91 billion rupees for the three months ended September 30, compared with a net loss of 997 million rupees a year earlier.
The loss is the biggest ever for Jet, the first of India's airlines to publish earnings for the quarter, according to data compiled by Thomson Reuters from company filings. It reported a net loss of 7.1 billion rupees in the September quarter of 2011.
Despite the sector's current problems, deep-pocketed foreign players such as Singapore Airlines (SIAL.SI), AirAsia Bhd (AIRA.KL) and Etihad have been lured to the country by longer-term growth prospects. The government expects passenger air traffic to almost triple during the current decade.
Etihad's $334 million deal for a 24 percent stake in Jet is the first investment by a foreign carrier in an Indian airline since the country last year changed rules to help channel capital into a sector.
But high costs of jet fuel and aggressive pricing as competition increases will likely hurt airlines' finances in the coming quarters, analysts say. Jet paid 8 percent more for fuel from a year earlier, it said.
Income from operations rose marginally to 37.88 billion rupees in the quarter ended September from 37.55 billion rupees a year earlier, Jet said, while expenses jumped nearly a fifth to 48.51 billion rupees. Some of its aircraft sat idle, accounting for 1.2 billion rupees in losses.
All players in India's five-player airlines market are losing money with the exception of unlisted IndiGo, the biggest carrier by local market share.
Kingfisher Airlines (KING.NS), once the No. 2 carrier, has not flown in a year for want of cash. India's three listed airlines stocks - Jet, Kingfisher and SpiceJet (SPJT.BO) - are the worst performers this year among 85 global airline stocks studied by Thomson Reuters StarMine.
Shares in Jet Airways are down about 38 percent this year, valuing the company at about $488 million. By comparison, the Nifty is up 4.6 percent.
(Additional reporting by Tripti Kalro in Bangalore and Praveen Menon in Dubai; Editing by Kenneth Maxwell and Mark Potter)