Facing a cash crunch and having posted losses for the second successive quarter, Jet Airways is now aiming for a turnaround.
India’s second-largest airline by market share Jet Airways is not the only airline facing financial woes. It may well be the one with higher debt but just like it, its peer group airlines too are impacted by surging fuel costs, competitive fares, loss of foreign exchange and higher operating costs. Yes, it is true that the board of Jet Airways deferred announcing the first quarter results earlier in the month of August. It is also true that various news reports suggested that the airline was running low on cash and was mulling cutting salary,amongst other measures to stay afloat. But when finally on the evening of 27 August the board of Jet Airways did announce its Q1 results (April-June), the picture was somewhat clear. The airline, partly owned by Etihad Airways, posted a loss of Rs 1,323 crore in the three months ended June 30 compared with a profit of Rs 53.5 crore a year earlier. Why? One of the reasons was higher fuel cost for the quarter. In fact for Jet Airways, the aircraft fuel expenses for the quarter surged 53 per cent to Rs 2,332 crore. A depreciating rupee and an about 36 per cent rise in global oil prices also dented the company’s profitability, it said in the statement. But it is not alone among its peer group airlines to have posted dismal financial results. Mid-August, low-cost carrier SpiceJet also reported a net loss of Rs 38.1 crore in the June quarter (against a net profit of Rs 175.2 crore in the year-ago period) on the back of higher fuel cost, weak rupee and a one-time provisioning of Rs 63.5 crore. Before that, IndiGo, the leader by market share, reported a 97 per cent erosion in net profit to Rs 27.8 crore from Rs 811.1 crore a year ago.
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