Debt laden Jet Airways (India) Ltd on Monday announced a steep loss of Rs 1,323 crore for the quarter ended June 2018 as against a profit of Rs 53.50 crore in the year ago period, a “comprehensive” programme that will result in cost reduction on over Rs 2,000 crore over the next two years and balance sheet restructuring through capital infusion and debt reduction.
For the June quarter, Jet Airways Group reported a net loss of Rs 1,326 crore compared to a net profit of Rs 58 crore in Q1 of FY18, it said after a board meeting. On August 9, the board had deferred announcement of unaudited financial results for the June quarter.
The cost reduction programme covers various facets of the company’s operations including maintenance costs, selling and distribution costs, fuel rate and optimisation, debt and interest cost reduction and enhancement of crew and manpower productivity. It also announced leveraging the well-established 8.5 million member JetPrivilege programme, capital infusion and debt reduction to result in significant reduction in the interest cost. However, it did not give details. “The two significant proposals considered by the board of directors today i.e. infusion of capital and the monetisation of the airline’s stake in its Loyalty programme bode well for the long term financial health and sustainability of the airline,” said Jet Airways Chairman Naresh Goyal.
Other measures proposed by the airline include providing choice and flexibility to guests in line with global best practices and standards. “Wet lease of excess ATR aircraft and simplification of sub-fleet complexity of B737s will result in further improvements to the bottom line,” it said. A spokesperson for the Etihad Aviation Group, said, “We remain committed to our strategic partnership with the airline.” Vinay Dube, CEO, Jet Airways said, “The rise in the price of Brent fuel, a depreciating rupee and a resulting mismatch between high fuel prices and low fares have adversely impacted Indian aviation industry, including Jet Airways.”