Jet to cut non-fuel costs by 12-15% over 2 yrs
Jet Airways (India) Ltd on Tuesday said it is on track to cut non-fuel costs by 12-15% over the next 18-24 months, a day after the airline’s board outlined a turnaround plan following a second straight quarterly loss.
Higher fuel costs, subdued yields and an unrealized foreign currency loss hurt Jet Airways in the June quarter, Amit Agarwal, chief financial officer, said in conference call with analysts.
The carrier, controlled by entrepreneur Naresh Goyal, had a few quarters earlier started the process to reduce its non-fuel costs to improve its finances.
Jet Airways, which had about 13.6% of the domestic market share in July, on August 27 reported a fiscal first quarter loss of ₹1,323 crore, excluding those of its unit.
Directors of the airline meanwhile approved a turnaround plan, which includes cutting costs by more than ₹2,000 crore over two years, improving pricing, better inventory management, leveraging the Jetprivilege Programme, capital infusion and fleet simplification.
The airline plans to bring down costs by cutting maintenance costs, selling and distribution costs, fuel rate and optimization, debt and interest cost reduction and enhancement of crew and manpower productivity, it had said in a statement.
On Tuesday, Jet Airways said it trimmed its debt to ₹7,364 crore as of end-june, from ₹8,082.65 crore as of end-march.
Agarwal said about 65% of the debt is dollar denominated.