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.
This story is from the September 1st, 2018 edition of Businessworld.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the September 1st, 2018 edition of Businessworld.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
MEMORIES & IMPRESSIONS
Ratan Tata was an exceptional human being. He was a visionary leader, esteemed industrialist, and a humanitarian, who left an indelible mark on India and the world.
The Robotaxi Market
The robotaxi market is shaping up to be a high-stakes battleground as tech giants and automakers race to transform urban mobility.
And the Nobel Prize Goes to AI
The recent Nobel Prize T awards to AI pioneers affiliated with Google have sparked a broader conversation about Big Tech's influence on research and the limitations of traditional prize categories.
Ola Electrified
Once considered a trailblazer in India’s electric vehicle (EV) ecosystem, Bhavish Aggarwal’s Ola Electric now faces a major accountability crisis.
Sharp Slide in Industrial Output on Eve of Deepavali
India’s index of industrial production (IIP) saw a sharp reversal in August, contracting by 0.1 per cent, in stark contrast to the 4.7 per cent growth in July, mostly because of significant contractions in mining and electricity generation.
Heralding the Solar Era with Sustainable Electrification
RAJEEV KASHYAP on the economics of solar power, the hurdles in scaling it, and much more
A WELL-GREASED MACHINE
The OmniBook X14 laptop runs on first-generation Snapdragon X Elite, which bets big on Al-enabled productivity and battery life, but falls short when it comes to overall experience, says Deep Majumdar
DO NOT LETA HEALTH CRISIS RUIN YOUR FINANCIAL HEALTH
For a family of four living in a metro, it is recommended to opt for a family floater health insurance plan with a sum insured of at least Rs 15-20 lakh
Disruption Ahead: Beyond Organisation Charts and Structures
ALBERT EINSTEIN FAMOUSLY said, “We cannot solve our problems with the same thinking we used when we created them.
Dr. Rahul Shivajirao Kadam: A Visionary Leader Blending Sustainability, Innovation, And Social Empowerment
We are on the stage of global warming, and these technologies not only help prevent further damage but also leave behind a better environment for future generations.
