India’s Jet Airways has flagged seeking a new equity infusion and monetising its loyalty programme after revealing a loss before tax of Rs13.2 billion ($198 million) for the quarter ended 30 June, reversing its profit before tax of Rs53.5 million from the previous corresponding period.
Revenue inched up around 2% to Rs60.7 billion as expenses rose 25% to Rs73.9 billion, led by an increase in fuel costs.
ASKs rose 9.4%, as RPKs increased 7.6%. It also recorded a 4% improvement in the utilisation of its Boeing 737 fleet to 13.7 hours. CASK excluding fuel shrank 1.5% to Rs3.17.
The carrier reported a net loss of Rs13.2 billion, compared to a net profit of Rs53.5 million.
“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 the Indian aviation industry, including Jet Airways,” says chief executive Vinay Dube.
In response to the loss, the carrier’s board has tasked management with executing a broad-based cost cutting programme to achieve savings of more than Rs20 billion, and reducing debt.
It will also place a priority on seeking additional cash equity infusions and monetising assets – namely its minority stake in its loyalty programme. The carrier says that those efforts are aimed at being achieved “in a time-bound manner.”
Chairman Naresh Goyal says that those two proposals “bode well for the long-term financial health and sustainability of the airline.”
Etihad Aviation Group, which holds a 24% stake in the airline, stated that it “remain[s] committed to our strategic partnership with the airline as it explores and leverages the opportunities presented by the growing Indian aviation market.”
Under its cost reduction programme, the airline will target maintenance, distribution, fuel, and labour productivity savings, while it has also signalled that it will wet-lease out “excess” ATR 72 capacity to other operators.
It will also seek to simplify the sub-fleets among its Boeing 737 fleet, and continue its focus on introducing 737 Max 8s into its fleet, in line with earlier plans.
Published at Tue, 28 Aug 2018 01:58:35 +0000