Jet Airways reports second consecutive loss, drafts revival plan

Jet Airways which was in the news for the past few days for all the negative reasons has reported its June quarter result on Monday.

For the first quarter of the fiscal year 2019, the company reported a net loss of Rs. 1,323 crore as against Rs. 53.5 crore net profit in the corresponding quarter of last fiscal. The company also had reported a net loss of Rs. 1,036 crore in the previous quarter. The company’s net revenue for the quarter was at Rs. 6,010.5 crore as against Rs. 5,648.9 crore in Q1FY18.

Macroeconomic factors such as an increase in Brent crude price of more than 36 per cent, a depreciating rupee and the resulting mismatch between high fuel prices and low fares primarily undermined the company’s performance in the quarter, stated a press release issued by the company.

Further, the company has drafted a turnaround strategy. The company is looking to save around Rs. 2,000 crore from its comprehensive cost reduction programme over the next two years.

In the latest quarter, the company’s finance cost upsurged to Rs. 248.9 crore from Rs. 195.4 crore in the corresponding quarter of last year. Amid a cash crunch, the board of directors of Jet Airways is looking for new capital infusion and debt reduction to reduce the interest cost. Also, the company is considering monetisation of assets including the company’s stake in its Loyalty programme

Going forward, the investor community will be keenly watching Jet Airway's strategies to survive during these unfavourable macroeconomic factors such as elevated Brent fuel prices and low airfares due to intense competition in the domestic market.

Meanwhile, with this recapitalisation and cost reduction plan, the stock during Tuesday’s trading session remained on a positive mark and closed for the day at Rs. 294.8 apiece, up by almost 5 per cent from previous close.