Jet Airways (India) Ltd., the nation’s biggest publicly traded airline, reported quarterly loss that was wider than analysts estimated as aircraft lease costs increased and it had a one-time expense.
The net loss widened to 4.96 billion rupees ($89 million) in the three months ended March from a loss of 2.98 billion rupees a year earlier, the Mumbai-based carrier said in a statement yesterday. The median of five analysts’ estimates compiled by Bloomberg was for a loss of 106 million rupees.
Jet Airways yesterday won shareholders’ approval to sell a stake in the airline to Etihad Airways PJSC in an effort to pare debt and expand operations amid competition from discount carriers. Airlines in India carried fewer passengers in the quarter as slower pace of economic growth damped travel demand.
Revenue declined to 39.2 billion rupees from 40.4 billion rupees. The carrier had a one-time expense on salary arrears of 1.6 billion rupees in the quarter and aircraft lease costs increased 42 percent to 3.4 billion rupees, the company said.
SpiceJet Ltd., the nation’s only listed discount carrier, narrowed losses during the period to 1.86 billion rupees from 2.49 billion rupees a year ago after winning more passengers, according to a statement from the Chennai-based company.
Jet Airways declined 4.3 percent, the biggest drop since March 4, to 561.15 rupees at the close of trading yesterday in Mumbai, before the results were announced. SpiceJet gained 2.6 percent. The benchmark S&P BSE Sensex advanced 0.2 percent.
Stockholders of Jet Airways approved preferential allotment of 27.3 million shares in the airline to Etihad for 20.6 billion rupees, or at 754.74 rupees apiece, Jet Airways said in a separate exchange filing. The transaction is subject to approvals from India’s Foreign Investment Promotion Board and the nation’s antitrust regulator.
The partnership with Etihad will help improve the operating cash flows and bring cost synergies, Jet Airways said in its earnings statement.
Etihad in February said it agreed to buy and lease back three pairs of London’s Heathrow airport slots to Jet Airways.
The Indian carrier said yesterday that it had bought out its frequent-flier unit Jet Privilege Pvt. in December. Etihad may invest in Jet Airways’ loyalty program, according to the Sydney-based CAPA Centre for Aviation.
Jet Airways winning Etihad funds is the first deal signed by an Indian carrier since India changed rules in September to allow a maximum of 49 percent investment by an overseas airline.
Domestic passengers carried by airlines in India declined 1.5 percent to 14.9 million in the three months ended March, according to the Directorate General of Civil Aviation. India’s statistics office has estimated the nation’s gross domestic product expanded 5 percent in the year ended March, the weakest pace in a decade.
Malaysia’s AirAsia Bhd. won approval in March from a government panel to hold a 49 percent stake in a new airline venture with Tata Sons Ltd. The company has applied for permission to start operations.