Jet Airways is overhauling its network after posting a net loss of Rs 12.61 billion in the third quarter of 2018-19. In the September quarter of 2017-18, it had reported a net profit of Rs 0.71 billion.
Total revenue rose 6.9 per cent to Rs 63.63 billion on a year-on-year basis, with the gains coming from international routes and passenger feed from partner airlines. The airline booked "expected refund of variable rentals" worth Rs 1.11 billion in revenue, which helped boost numbers.
After the weak results, the airline on Monday said it was conducting a comprehensive review of its network, product and services. It was engaging with its "financial stakeholders" as high fuel prices and low fares hurt its operations, the firm added.
Sources said the airline would withdraw flights between south India and West Asia. It will add international frequencies from Mumbai and New Delhi, they added.
The management said a 50 per cent rise in fuel prices, a depreciating rupee, and a challenging pricing environment undermined its performance. Total expenses rose 26.7 per cent to Rs 76.97 billion. This was the airline's third successive Rs 10 billion-plus loss, thus making fund infusion critical for the carrier.
IndiGo, its rival, posted its first loss of Rs 6.52 billion in the September quarter since its listing, suggesting that even the market leader was not immune to tough conditions. Bloomberg had estimated that Jet might post a net loss of Rs 11.41 billion.
Jet Airways is facing a fund crunch, resulting in delay in salaries to employees and payment to vendors. It is exploring a stake sale to raise capital. Talks have been held with private equity firms and the Tata group. The airline’s trade payables rose by Rs 15 billion over the past six months because of losses.
“The airline continues to engage with financial stakeholders for supporting its funding requirements till it starts generating operational surplus and is working on the monetisation of its assets and capital infusion,” Jet said. It said the turnaround and cost-saving strategy was on track and in the first half of FY19, it had saved Rs 5 billion in costs.
“With our focus on profitability, we are in the midst of turning the ship around. We remain engaged with all our partners who acknowledge the challenges faced by the Indian aviation industry,” said Vinay Dube, chief executive officer at Jet Airways. The airline said it would induct 11 Boeing 737 Max planes in the current financial year, but indicated that overall capacity growth would remain flat. Jet said it would rationalise operations on select uneconomic routes and redeploy capacity in more productive markets. This will see an increase in flights to Bangkok, Dubai, Doha, and Kathmandu. At present, the airline flies to West Asia from Kochi, Kozhikode, Thiruvanthapuram, and Mangaluru.
“Gulf operations are being optimised to focus on building greater connectivity over hubs in Mumbai and Delhi instead of point-to-point connectivity. The scale of operations will continue at the same level as the airline currently operates,” the airline said.