Jet Airways returns to profit in 1Q

India’s largest airline group, Jet Airways (9W) has returned to the black in the first quarter with a net income of INR52.7 billion ($948.5 million), up 31.4% from the year-ago period. The group comprises Jet Airways and Jetlite, and operates a combined fleet strength of 121 aircraft. Net profits after tax grew to INR247 million against a loss of INR1.6 billion last year.

The profits come after five consecutive loss-making quarters.

9W is the second Indian carrier to report a reversal of its fortunes. Low-cost carrier SpiceJet reported similar results last week. Both have benefited from failing Indian carrier Kingfisher Airlines’ drastic cut in capacity as it struggles for survival.

9W’s domestic yield rose 8.9% year-over-year while JetLite yield increased 43.2%, as fares went up system-wide. The group carried 10% more passengers year-over-year.

“Fuel cost increase and depreciation of the Indian rupee vis-à-vis the US dollar weighed heavily on the industry’s profitability. Crude oil prices have come off the highs of $120 per barrel and now range between $100-105 per barrel [Brent crude],” 9W CEO Nikos Kardassis said.

“However, benefits of this have not accrued due to the depreciation of the Indian rupee, which has also put pressure on our dollar-denominated costs.”

The quarter’s results took into account INR1.7 billion for exchange rate fluctuations. System-wide ASKs were 10.3 billion, up 10.4%. International operations accounted for 56% of total revenues.

Meanwhile, the airline has decided to trim capacity to reduce the debt on its balance sheet and release cash. It completed the sale and leaseback of two aircraft and two engines in the first quarter of FY2013.

During the second quarter, management intends to complete transactions for another eight to nine narrow body aircraft.