Tuesday, November 13, 2018

Jet Airways' Liabilities Surge After Third Consecutive Loss

Jet Airways India Ltd. saw both current- and non-current liabilities surge in the second quarter, after intense competition and low fares led to its third consecutive quarterly loss.

Current liabilities rose to 160 billion rupees ($2.2 billion) as of Sept. 30, compared with 142 billion rupees as of March 31, while non-current liabilities jumped 30 percent during the same period.
Key Insights
The loss at the nation’s biggest full-service carrier is the latest sign that Indian airlines are struggling to survive in a market where competition has depressed fares and high fuel prices negate gains from a surge in demand for air travel.
Jet Airways continues to engage with financial stakeholders to support funding requirements. It has started a review of its network, including capacity and flight frequencies, signaling some loss-making routes will be cut.
The Mumbai-based carrier isn’t the only one in trouble. IndiGo, the low-cost operator, reported a quarterly loss for the first time as a publicly traded company for the three months through September. SpiceJet Ltd., a budget carrier, has said it’s seeking more time to pay for leased aircraft.
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Jet Airways, which hasn’t made a profit in nine of the past 11 fiscal years, has been seeking to raise funds to ease a cash crunch. Last month, it said it received notices from aircraft leasing companies about late payments or contract defaults.
Jet Airways shares have slumped 71 percent this year, shrinking its market value to $377.5 million. Besides pledging to cut costs, the board in August proposed to pare debt and sell the carrier’s stake in JetPrivilege, a loyalty program.

12/11/18 Rahul Satija  and Anurag Kotoky/Bloomberg

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