Jet Airways (India) Ltd. reported a first-quarter standalone net loss of Rs. 1,323 crore, compared with a profit of Rs. 53 crore a year earlier, after higher outgo on fuel expenses and the impact of currency fluctuation sent the carrier deeper into the red.
The cash-strapped airline had posted a loss of Rs. 1,036 crore in the preceding quarter.
Fuel cost increased by Rs. 269 crore from the previous quarter and Rs. 808 crore compared with the year-earlier period. During the quarter, Jet recorded a foreign currency fluctuation impact of Rs. 364 crore.
“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,” said CEO Vinay Dube.
“It [the result] is not so alarming,” said Mark Martin, founder and CEO, Martin Consulting, an aviation consulting firm. “The significant increase in fuel price and currency impact affected the results. Now, they must take corrective steps and arrest [the] slide by Q4.”
Owing to continuous losses, the company’s net worth turned negative as on June 30. The financial results in the quarter are prepared on a going concern basis. In their review of the financial results, the statutory auditors issued an unmodified opinion on the results.
Jet Privilege stake sale
On Monday, the board also considered cost cutting measures, debt reduction and funding options including capital infusion and monetisation of assets including Jet’s stake in its loyalty programme.
“The proposals…bode well for the long term financial health and sustainability of the airline,” said Chairman Naresh Goyal.
Separately, the DGCA has commenced a 4-day safety audit of the airline. The audit involves examination of data including on accidents, technical glitches and availability of spare parts, a senior DGCA official said.
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