Cash-strapped Jet Airways reports Rs 1,323 crore net loss

Mumbai: The Naresh Goyal-run Jet Airways on Monday reported a whopping Rs 1,323 crore of net loss for the three months to June owing to higher fuel cost and other expenses due to the falling rupee.

The ongoing cash crunch has forced the airline to embark on a Rs 2,000-crore cost cutting drive and stake sale in its loyalty programme Jet Previlage as part of capital infusion.

The airline, which publicly admitted to cash flow issues, had posted a net profit of Rs 53.50 crore in the year-ago period.

This is the second straight quarterly loss for the airline, which had aburptly postponed result annoucement on August 9, leading to a slew of regulatory queries. In the March quarter, too, the airline had reported net losses of Rs 1,036 crore.

On the cost cutting and stake sale plan, chairman Naresh Goyal said that the board today approved two significant proposals: capital infusion and monetisation of the airline's stake in its loyalty programme Jet Previlage.

"These two measures bode well for the long-term financial health and sustainability of the airline," Goyal said in a statement.

Total income marginally improved to Rs 6,066 crore from Rs 5,953 crore a year ago, the airline said in an exchange filing.

Fuel cost soared 53 per cent to Rs 2,332 crore from Rs 1,524 crore in the year-ago period.

On a consolidated basis, the airline said its loss stood at Rs 1,326 crore, against a net profit of Rs 58 crore a year ago.

The airline expects to reduce costs by Rs 2,000 crore over the next two years by way of various cost-reduction measures.

"Comprehensive cost reduction programme will result in excess of Rs 2,000 crore over the next two years," it said. It explained that cost reduction covers various facets of operations, including maintenance costs, selling and sistribution costs, fuel rate and optimization, debt and interest cost reduction and enhancement of crew and manpower productivity.