Tuesday, August 28, 2018

Jet Airways promises cost cuts as losses widen

New Delhi: Jet Airways, India’s oldest private airline, has promised $285m of cost cuts in the next two years, after its losses widened to $189m in the most recent quarter.

The company blamed its deteriorating performance in the three months ending June 30 on rising fuel prices and falls in the value of the rupee, which it said had hit the entire Indian aviation industry. It made a loss of $142m in the first quarter of 2018.

However, the struggling carrier, which is 24 per cent owned by Etihad Airways, also said it will now seek new capital, which it would use to pay off debt and reduce its high interest costs. It also said it would seek to make more money from its loyalty programme, which has about 8.5m members.

India has a fast-growing but notoriously price-sensitive airline market. Price wars have been vicious and it has a history of carriers running out of cash, including the now defunct Kingfisher Airlines which collapsed in 2012 under a mountain of debt.

While all of India’s airlines have had worsening financial performance in the past quarter, Jet, a full service carrier that also has an older fleet than rivals, appears the hardest hit.
27/08/18 Amy Kazmin/Financial Times