Amidst ongoing growth in the Indian aviation sector, Jet Airways Group declared its highest-ever annual profit for the year ended 31st March 2016. The group reported a net profit of $185m on sales of $3.4bn (+5.9%) in FY16 compared to a loss of $342m the previous year.
The return to profitability has been achieved a year earlier than the target set in the turnaround plan two years ago, though the company acknowledged that competitive and structural challenges in the Indian aviation market continue to exist.
EBITDA in FY16 jumped to $470m, compared to $128m in FY15, primarily due to higher utilization of aircraft, drop in ATF prices, cost reduction initiatives and synergies achieved with Etihad Airways. EBITDAR surged to $818m, versus $482m in FY15.
For the fourth quarter of FY16, the company reported a net profit of $63m, compared to a loss of $291m for the same period last year. It marks the company's fourth straight quarter of profitability.
Improved operational efficiencies were reflected in the cost per available seat kilometer (CASK), excluding fuel, which dropped 3.2%, to 4.96 cents, in FY16. Passenger traffic increased 14.8%, to 25.8 million.
The airline attributes the improvement in performance primarily to the combination of enhanced fleet utilization and network optimization— which enabled better integration between domestic and international operations — along with the benefits of its partnership with Etihad. Codeshare traffic with Etihad over its Abu Dhabi hub and with its partner airlines grew 45% in Q4 of FY16. The two airlines now claim to have the largest market share of Indian international traffic.