Jet cuts debt, trims wage bill

Employee count lower by over 1,000

Jet Airways has cut down its debt and reduced its wage bill helping the airline to achieve Rs 93 crore profit in third quarter of FY 2013. Employee count reduced by 1,139 in the preceding  third quarter on a year-on-year, the airline told equity analysts on Monday.

The airline posted Rs 93 crore profit for the third quarter FY13 in comparison to Rs 122 crore loss in the same period last year.

The airline's wage bill reduced 12.8% to Rs 367 crore in third quarter of FY 2013. Jet's vice president (investor relations) K G Vishwanath said that head count reduced because of high level of attrition amongst cabin crew and ground staff and non filling up of the vacant posts.

Also the airline terminated contracts of foreign pilots and filled up those with local pilots resulting in lower wage bill. Jet's overall expense on a stand alone basis too was lower by 7.5% due to reduction in fuel cost and sales and distribution costs.

The airline has earlier denied reports that it was axing employees as a cost saving measure and stated it was focussing on "several non-payroll areas" to reduce costs.

Vishwanath also stated that the airline reduced its debt including the aircraft acquisition loan and working capital debt  from $2.6 billion (Rs 13,800 crore)  last April to $2.16 billion (Rs 11,900 crore) by December end.

“All of our efforts on revenues, costs and network side have resulted in turning around the airline operations. This is despite higher fuel prices and rupee depreciation impact that we have had in the last few months. The combined impact of higher yields and lower costs (excluding  fuel) have resulted in significantly lowering the breakeven seat factor levels in the business. We continue in our endeavor on cost cutting measures, exploring various avenues of ancillary revenues and process improvements across all segments of the business, which will help us improve the business further," Jet chief executive officer Nikos Kardassis said in a statement on Friday.

Jet signs maintenance contract with ATR

Jet Airways has signed a global maintenance agreement valued about $48 million with European turboprop aircraft manufacturer ATR.

This new agreement  extends the agreement for the following 7 years and covers the supply of spare parts and maintenance services for the fleet of ATRs of the airline.

Jet Airways, including its subsidiary Jet Konnect, currently operates a fleet of 16 ATR 72-500 and 1 ATR 72-600 aircraft,  and will introduce an additional 4 new ATR 72-600 aircraft into its fleet. The airline has been operating ATR aircraft since 1999 and has covered its fleet with such agreements  since the beginning of its partnership with ATR, airline announced today.