Hit by high fuel costs and continued price war in the domestic market, Jet Airways, India's second largest airline in terms of market share, reported a huge net loss of Rs 1,261 crore in the July-September quarter, versus a profit of Rs 71 crore a year ago.
Its total revenue for the quarter stood at Rs 6,363 crore, up 7 per cent from a year ago.
“The tough industry environment in the backdrop of a sharp rise in brent fuel price by more than 50 per cent over second quarter FY18, a depreciating rupee and a challenging pricing situation in an over-capacitated domestic market, continued to undermine Jet Airways’ performance for the quarter,” the airline said.
Its not just Jet Airways that has been hit. The aviation sector as such is facing turbulent weather, with costs rising and airlines in no mood to raise ticket prices in the wake of fierce competition. Earlier, InterGlobe Aviation, the parent of India's largest carrier Indigo, had reported a loss of Rs 652 crore, its first quarterly loss since it went public three years ago.
There has been speculation in recent days that rivals including Tata Group and US-based Delta Airlines have held talks with Jet for potential stake acquisition as the airline is in desperate need of funds. None of the parties have officially commented on the matter.
The airline continues to engage with financial stakeholders for supporting its funding requirements till it starts generating operational surplus and is “actively” working on the monetisation of assets and capital infusion, Jet said on Monday.
Vinay Dube, the CEO of Jet said the airline was clearly focused on getting back to profits and he was confident of overcoming the headwinds.
“With our clearly defined focus on profitability, we are in the midst of turning the ship around. We are confident that we will overcome our current challenges, honour our commitments to our stakeholders, and deliver a more strategic, efficient and financially viable airline,” he said.
Dube further added that the airline is “closely engaged” with its partners, who acknowledged the challenges faced by the Indian aviation industry and had been “very supportive.” The airline's focus would remain on safety and operational reliability as it navigated the challenges, he said.
The airline has embarked on a comprehensive review and consolidation of its network involving routes and markets, as well as products and services offered. The measures will include rationalisation of operations on select, uneconomic routes and the redeployment of these assets to more productive and economically efficient international as well as domestic sectors, closely aligning capacity with market demand.
Earlier this month, Jet Airways started direct flights from Mumbai to Manchester in the UK and is launching three additional services to Singapore from Mumbai, Delhi and Pune. It also intends to launch additional frequencies between Delhi-Bangkok, Mumbai-Doha, Delhi-Doha, Mumbai-Dubai and Delhi-Kathmandu in the winter schedule.
The company had earlier outlined plans to save costs in excess of Rs 2,000 crore over the next two years, as a part of its turnaround strategy. In the first half of the current financial year, the airline said it has already realised costs savings of over Rs 500 crore.
