Jet Airways hits air pockets

Jet Airways lost over 10.5% in the opening bell, going on to hit a new 52-week low at Rs.376.60 and continues to remain among the top five losers on the BSE.

The company posted a ‘surprise’ loss in Q4FY18 earnings – we say surprise because no one had expected the company to show a loss for Q4!

The net loss for the quarter was at Rs.1036 crore v/s net profit of Rs.602 crore (YoY). This was on a 9% rise in revenue at Rs.5,925 crore.

The loss was on account of three factors:

1. An over 30% increase in fuel expenses at Rs 2,063 crore due to rising international crude oil prices without a corresponding increase in air fares.
2. One-time maintenance charge of Rs 253 crore.
3. An impairment loss of Rs 46 crore on the loans advanced to subsidiary Jet Lite (India).

The auditors have raised a red flag in the Independent Auditor's Report attached with the financial results as its net worth has turned negative in March 2018. The auditors have noted, “The appropriateness of assumption of going concern is dependent upon realisation of the various initiatives undertaken by the Company and/or the Company’s ability to raise requisite finance or generate cash flows in future to meet its obligations, including financial support to its subsidiary companies.”

Fuel prics have been on a rise, more so than in Q4 in the current Q1. Wonder how that is going to impact the earnings in the first quarter.