Tuesday, September 04, 2018

Jet Airways gets downgraded, again

Mumbai: Full service airline Jet Airways hit another air pocket on Tuesday as its short-term and long-term loan facilities were further downgraded by rating agency ICRA for the third time in less two years.

ICRA downgraded credit ratings on Jet Airways’ short-term and long-term loan facilities citing weakened financial performance as the airline is unable to pass on the rise in jet fuel prices to customers.

“The company has large debt repayments due over FY2019 (?3,120.3 crore), FY2020 (?2,444.5 crore) and FY2021 (? 2,167.9 crore). The company is undertaking various liquidity initiatives, which includes, among others, a stake sale in Jet Privilege Private Ltd, and the timely implementation of these initiatives is a key rating sensitivity,” ICRA said in a report.

The downgrade came despite hopes of revival at the airline after the private carrier announced a slew of cost-cutting measures and plan to sell stake in its frequent flyer programme. Despite its worst-ever performance in the first quarter, Jet Airways stock saw a revival as investors seemed convinced with the company’s plan of action. A fresh downgrade can reverse all that gain Jet managed to gather.
04/09/18 Business Line