Jet Airways logs Rs 1,323-cr loss on fuel costs

Cash-strapped Jet Airways, which on Monday reported a whopping Rs 1,323 crore of net losses for the June quarter due to higher fuel cost, falling rupee and low fares, said it will monetise loyalty programme JetPrivilege and wet-lease some of its small aircraft to mobilise urgent working capital.

This is the second straight quarter of losses for the Naresh Goyal-run airline, which had last month publicly admitted to cash-flow issues. The airline had booked a net profit of Rs 53.50 crore in the year-ago period, while in the March quarter it had reported net losses of Rs 1,036 crore.

The airline said it fuel cost soared 53 per cent to Rs 2,332 crore in the quarter, while low fares had revenue inching up to Rs 6,066 crore from Rs 5,953 crore. On a consolidated basis, the net loss stood at Rs 1,326 crore, against a net profit of Rs 58 crore a year ago. The second back-to-back quarterly loss forced Jet Airways, which delayed the result announcement on August 9 indefinitely, to announce a turnaround plan which, according to chairman Goyal, includes a capital infusion by selling a stake in JetPrivilege, and a massive cost cutting to save around Rs 2,000-crore over the next two years.

"The board on Monday considered two significant proposals: infusion of capital and monetisation of the airlines' stake in the loyalty programme," Goyal said. It can be noted that the airline owns 49.9 per cent in JetPrivilege and the rest is with its equity partner Etihad, which owns 24 per cent stake in the airline.