Naresh Goyal-promoted Jet Airways on Monday reported a consolidated net loss of Rs 1,261 crore for the July-September quarter. The carrier had posted a net profit of Rs 71 crore a year ago. The airline’s current liabilities exceed its current assets.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The management blamed the rising aircraft fuel cost that increased over 50%, depreciating rupee, a challenging airfare pricing situation in a domestic market with over capacity among the prime reasons for the continued losses. The company had declared Rs 1,323 crore of loss during the previous quarter. A back of the envelope calculation shows that Jet Airways has been losing around Rs 14 core every day. In comparison, the debt-ridden national carrier Air India’s per day losses were at less than Rs 10 crore last year.

Concerned over the severe losses, Jet Airways, which is working on a turnaround strategy, is believed to be in talks with a few private equity firms and corporates including Tata Sons for fund infusion.

The point of contention, according to reports, has been a controlling stake of 51% that Tata Group is demanding while Goyal is said to be opposing it. Mumbai-based Tata Group, which already runs two airlines in India - the full-service carrier (FCC) Vistara and low-cost carrier (LCC) AirAsia - wants to merge Jet Airways with the former.Additionally, Jet Airways’s management said it plans to save around Rs 2,000 crore over the next couple of years by the way of sub-leasing some of its fleet, renegotiation of contracts, better utilisation of resources, etc. Cost saving of over Rs 500 crore has already been realised to date (in H1FY19), the airline said in a statement.

Watch Zee Business Tweet Video here:

Jet Airways flies into Rs 1,261 loss in second quarter