Jet, AI put top execs on alert over mounting losses

New Delhi: Two of India’s largest airlines, Air India and Jet Airways, have sounded caution on their fiscal health due to mounting operational costs.
A daily operational loss of $2 million (Rs 8.6 crore) has in fact forced Jet Airways to put its employees on alert.
Jet’s senior general manager (MIS & investor relations), KG Vishwanath, has shot off a letter to its senior executives on the current state of affairs, “The current situation is very grave in terms of the magnitude of losses that we have been incurring. We are very concerned, so is the chairman (Naresh Goyal). Our current losses are $2 million a day (including JetLite). The current run rate of Jet Airways’ domestic losses is $0.5 million (Rs 2.15 crore) and of JetLite is another $0.5 million. Our international business is losing over $1 million (Rs 4.30 crore) a day.”
The situation is equally grave for the national carrier. Driven by mounting losses of almost Rs 10 crore a day, Air India, in its merged avatar, is now considering severe cost-cutting measures like slashing employee allowances, reducing in-flight catering expenses on short-haul flights and restructuring functional arms.
The airline is also considering other options like cutting maintenance costs by stationing officers at hubs, instead of allowing them to travel at regular intervals. Civil aviation minister Praful Patel is likely to review the performance of the airline in the next few weeks, thanks to its mounting losses and falling load factor.
24/06/08 Chanchal Pal Chauhan & Nirbhay Kumar/Economic Times

To Read the News in full at Source, Click the Headline

Categories: Jet Airways Jun 2008, NACIL Jun 2008