* Jet Airways Q4 loss widens, SpiceJet's narrows
* Jet says Etihad deal will bring immediate revenue growth
* Rising fares bode well for India's struggling airlines
(Adds Jet comments, SpiceJet results)
NEW DELHI, May 24 India's Jet Airways
and its smaller rival SpiceJet reported quarterly
losses on Friday as fare increases were not sufficient to cover
high costs of operations.
Jet, which has agreed to sell a 24 percent stake to Gulf
carrier Etihad in a $370 million deal, was optimistic of demand
growth and said airlines were regaining their pricing power.
Airlines in India have increased fares in recent months
after Kingfisher Airlines, once the country's No.2 carrier,
stopped flying last October, burdened by its high debt and as
its flying licence was suspended.
But high fuel costs and airport taxes, and a weak local
currency still pose problems, and both Jet and SpiceJet cited
these factors in their statements.
Jet said in a statement on Friday its planned deal with
Etihad would bring "immediate revenue growth and cost synergy
opportunities" and help strengthen its balance sheet.
Etihad's investment in Jet is the first by an overseas
operator in an Indian airline since ownership rules were relaxed
and provides Jet with a deep-pocketed global partner as well as
cash to retire debt.
Jet shareholders approved the deal at a meeting in Mumbai on
Friday, a senior company executive said, but a proposal to
change the company's rules for operations, or the so-called
Articles of Association, was deferred as the company awaits
The deal is yet to win approval from Indian regulators.
Jet, controlled by Indian businessman Naresh Goyal, said its
net loss widened to 4.96 billion rupees ($89 million)for its
fiscal fourth-quarter ended March, from 2.98 billion rupees
reported a year earlier.
Total revenue for the country's No.2 carrier by domestic
market share, fell to 44.84 billion rupees from 46.34 billion
rupees a year earlier. Jet said its fourth-quarter results
included a one-time impact of 3.1 billion rupees, mainly due to
payroll arrears, maintenance and foreign exchange losses.
SpiceJet, ranked No.3 by local market share, said net loss
for the three month to March narrowed to 1.86 billion rupees
from 2.49 billion rupees a year earlier.
SpiceJet however saw its revenue for the quarter rising 31
percent from a year earlier to 14.56 billion rupees as number of
passengers grew by a fifth.
"We continue to be confident of the future," SpiceJet Chief
Executive Neil Mills said in a statement, hoping the company's
expansion on international routes will help improve its
Ahead of the results, Jet shares closed 4.3 percent lower,
but SpiceJet gained 2.6 percent in a Mumbai market that ended
0.3 percent higher.
($1 = 55.6400 Indian rupees)
(Reporting by Devidutta Tripathy; Editing by Sophie Walker)