Jet Airways finally announces quarterly result, posts Rs 1,323 cr net loss
Jet Airways, India's second-largest airline by market share, posted a first-quarter loss, hurt by higher fuel expenses. Jet Airways reported a Rs 1,323 crore net loss for June quarter on a standalone basis.
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Jet Airways shares sink over 8% amid uncertainty over open offerJet Airways, India's second-largest airline by market share, posted a first-quarter loss, hurt by higher fuel expenses. Jet Airways reported a Rs 1,323 crore net loss for June quarter on a standalone basis.
Jet Airways posted a loss of 13.23 billion rupees ($188.76 million) in the three months ended June 30, compared with a profit of 535 million rupees a year earlier.
Aircraft fuel expenses for the quarter surged 53 percent to 23.32 billion rupees.
“The two significant proposals considered by the Board of Directors today i.e. infusion of capital and the monetization of the airline’s stake in its Loyalty programme bode well for the long term financial health and sustainability of the airline.”, said Naresh Goyal, Chairman Jet Airways.
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 the Indian aviation industry, including Jet Airways”.
“We are implementing a host of measures to reduce costs and grow revenue, while retaining our focus on our guests. I am confident that the various transformation initiatives identified and under implementation by the Company will help in addressing the challenges faced by us. In fact, several such transformation initiatives have already started to deliver positive results”.
Jet Airways Group Q1, FY19 highlights
• Total revenue up 5.2% at INR 6,257 crores compared to INR 5,951 crores in Q1, FY18
• Available Seat Kilometers up 9.4% at 15.28 billion over Q1, FY18
• Passengers carried increased by 3.9% to 7.38 m over Q1, FY18
• Interline and Codeshare traffic increased by 5.1% to 0.59 m guests over Q1, FY18
• Cargo revenue up by 19.2% to 515 crores over Q1, FY18
• Non-fuel CASK reduced by 1.5% to 3.17 over Q1, FY18
Given the uncertainty created after teh delay in announcing of quarterly results, Jet Airways added that it was taking some remedial steps. It said,
"Given the challenging business environment, Jet Airways has been implementing additional measures to reduce costs and achieve greater efficiencies of operations."
Key decisions of Turnaround strategy
1. Comprehensive cost reduction programme: Will result in an excess of INR 2,000 crores of cost reduction over the next two years. The cost reduction programme covers various facets of the company’s operations including Maintenance costs, Selling and Distribution costs, Fuel rate and optimization, Debt and Interest cost reduction and enhancement of Crew and manpower productivity.
2. Induction of fuel and cost-efficient B737 MAX aircraft: Contributing to the stated 8-10% growth plan.
3. Revenue enhancement programme: Delivering 3-4% growth in RASK through tactical and strategic initiatives around network, pricing, inventory management and sales.
4. Product and service improvements: Provide choice and flexibility to guests in line with global best practices and standards.
5. Leveraging the well-established 8.5m member JetPrivilege programme
6. Balance sheet restructuring: Capital infusion and debt reduction to result in significant reduction in the interest cost.
7. Fleet simplification: Wet lease of excess ATR aircraft and simplification of sub-fleet complexity of B737s to result in further improvements to the bottom line.
(Agencies)
