Jet Airways faces going concern risks: Auditors

■ THE AIRLINE posted 1,036 crore net loss for the March quarter due to rise in oil prices and weaker rupee, compared to a profit of 602.4 crore Q4FY17.

Mumbai, May 24: With Jet Airways incurring a huge loss of over ` 1,000 crore in the fourth quarter, the airline’s auditors have flagged the financial weakness that could make it lose the “going concern” tag.

In accounting parlance, the ‘ going concern assumption’ means that the company will remain in business for the foreseeable future without being forced to halt operations and liquidate its assets.

If a company loses the tag, it is said to have uncertain future in terms of its operations.

The airline posted a whopping ` 1,036 crore net loss for the March quarter due to rise in oil prices and weaker rupee, compared to a profit of ` 602.4 crore in the corresponding period of FY17.

The full service carrier reported a quarterly loss for the first time in eleven quarters.

For financial year 201718, the airline reported a standalone net loss of ` 767.62 crore, against a net profit of ` 1,482.52 crore earlier.

Reacting to the news, the shares of the airline plunged over 12 per cent, hitting its 52- week low.

The airline, however, said it may raise debt in the next one or two quarters. “There could be a short- term blip in terms of rise in the debt,” Jet Airways CFO Amit Aggarwal said during a postearnings analysts call.

He said the airline has already reduced its debt by ` 3,000 crore over the last two- and- a- half year, adding that the overall strategy of reducing debt would continue on an ongoing basis. As on March 31, 2018, the airline's gross debt stood at ` 8,424 crore, of which ` 2,054 crore was aircraft related, Mr Agarwal said.