Air Fare Discounts still Prevail

Sometimes it is Jet Airways offering 20% discount on its air fare, sometimes it is Air Costa coming up with a Rs 777-off offer.

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On June 2, 2016, Jet Airways, India’s premier international airline, had announced special offers on Economy and Première fares as part of its #GetMore campaign.

Air Costa presently flies to Vijayawada, Bangalore, Chennai, Ahmedabad, Vizag, Hyderabad, Coimbatore, Tirupati and Jaipur. Its fleet comprise of the contemporary E-190 Embraer Jets.

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The sale is a bit unanticipated for this time of the year and a bonanza for people who had not made any travel plans, as well as for those who prefer to travel at off-peak times. At NC Airways, we have seen a big upsurge in bookings as the sale is open only for limited period.

Low Fuel Costs Help Jet Airways Post Profits

Jet Airways, India’s second biggest airline by passengers, reported an annual profit on May 27, 2016 for the first time since 2007 and a year ahead of schedule under its 2014 turnaround plan.jet

Jet Airways is partially owned by Abu Dhabi’s Etihad Airways. Etihad Airways PJSC holds a 24% stake. Jet Airways seem to be financially benefited from its stake sale to Etihad. Apart from giving it a much needed cash infusion, it also brought about synergies in terms of joint fuel uplift, marketing and sales.

Jet competes with state-run Air India and Vistara – a joint venture of Tata Group and Singapore Airlines – in the so-called full-service category. However, Indian Aviation domestic market is dominated by low-cost carriers.jet-pti-L

For the year ending on March 31, its net profit was Rs 12,120 million ($181 million) compared with a loss of Rs 20,970 million in the previous year.This profit is mainly due to lower fuel costs, higher traffic, lower finance costs and higher aircraft utilization and network optimization, which enabled better integration between domestic and international operations through the year ending on March 31.

Net profit in the quarter ended 31 March was Rs 3,971.6 million, as against a net loss of Rs 17,289.9 million in the same quarter a year earlier.

Net sales rose 3.57% to Rs 52,452.8 million in the quarter from Rs 50,645.2 million in the same period a year ago

Jet Airways lowered its debt by Rs 16,800 million during the year but did not disclose the debt detail.

download (5)“The airline would continue to focus on strengthening its balance sheet to sustain growth,” chairman Naresh Goyal said in a statement, although he said competitive and structural challenges remained. “The induction of capacity and the enhanced competitive scenario is creating a constant pressure on yields,” Mr Goyal said. Clearly, Mr Goyal is aware of the competitions and the possibility of ATF prices rising again.

Prices of aviation turbine fuel (ATF) have turned around the fortunes of most Indian carriers. It fell 22% in the twelve months till the end of Financial Year 2016. Jet and other Indian airlines have benefited from a slump in crude oil prices that lowered fuel expenses, which is the single biggest component in an airline’s operating expenses. It makes up around 40% of their total costs. Two other listed airlines also made a profit in fiscal 2016.

Jet’s Fuel costs in the year was Rs 54,033.7 million . A year ago it was Rs 74,018.7 million . A big 27 % drop. A huge saving of Rs 19,985 million. This being the chief  reason for the company to recover from a loss of Rs 20,970 million and post a profit of Rs 12,120 million in one calendar year. 

The air traveler is also benefited as he too gets cheap air tickets which the airlines are able to provide.

ATF price per litre in Delhi:

ATF price have generally shown a downward trend
ATF price has generally shown a downward trend

– Today, is at Rs 42.15,
– in June 2015 it was Rs 53.35,
– in October 2013 it was Rs 77.09

Last month, IndiGo, India’s biggest airline, too reported a record net profit of Rs.19,900 million in the year ended 31 March, while SpiceJet Ltd posted a record profit of Rs 4,070 million for the year.

InterGlobe Aviation Ltd’s IndiGo is India’s top carrier with 38.7 per cent of the market as of April.

Jet Airways and Jetlite together had a market share of 18.9 per cent in April, down from 23.1 per cent a year ago.