Jet Airways reviews route plans as Q2 loss mounts to Rs1,297 crore
13 Nov 2018
Jet Airways, the country's biggest full-service carrier, on Monday reported a Rs1,297-crore Q2 loss, its third straight quarterly loss, hurt by higher fuel costs and a weak rupee, compared with a profit of Rs49.6 crore a year earlier, the airline said.
Jet Airways said it would seek to lower costs, fuelled by a 58.6 per cent increase in fuel costs and boost revenues. On Monday, the airline said its costs rose 58.6 per cent to Rs2,420 crore in July-September this year.
The airlines said it would cut flights on less profitable routes and add capacity to more lucrative sectors, as part of its effort to lower costs and boost revenues as it struggles to stay aloft.
"The airline has embarked on a comprehensive review ... The measures will include rationalisation of operations on select, uneconomic routes," Jet Airways said in a statement, adding that it will redeploy planes to more productive domestic and international sectors.
Jet Airways, which is part-owned by Etihad Airways, said with falling oil prices and a more efficient network, the airline expects to deliver profits despite shrinking market share.
"With our clearly defined focus on profitability, we are in the midst of turning the ship around," Jet Airways chief executive officer Vinay Dube said in the statement.
A combination of rising oil prices, high fuel taxes, a weak rupee, low fares and intense competition have slashed profits in the world's fastest-growing aviation market, which is clocking 20 per cent annual passenger growth.
Jet Airways had a negative net worth as on 30 September, with current liabilities exceeding current assets, the airline said.
The company said it is on track to meet its target of more than Rs2,000 crore of cost cuts over two years, having already made savings of Rs500 crore in the first half of the current fiscal year.
During the latest quarter it expanded a code share agreement with Delta Airlines, Etihad Airways, Korean Air, Malaysian Airlines and Bangkok Airways to boost revenues.
It said it continued to talk to financial stakeholders regarding its funding requirements and was working on selling assets and raising capital.
Earlier this month, a media report said Tata Group was in talks to buy a majority stake in the airline and its frequent flyer programme, JetPrivilege. Jet Airways said the report was speculative.
"We are confident that we will overcome our current challenges, honour our commitments to our stakeholders, and deliver a more strategic, efficient and financially viable airline," Dube said.