Jet Airways Reports Rs 1,297-Crore Loss In Q2, Says It Will Cut Flights

Debt-laden carrier Jet Airways will cut flights on less profitable routes and add capacity to more lucrative markets, as part of its effort to lower costs and boost revenues as it struggles to stay aloft.

Jet Airways, the country's biggest full-service carrier posted its third straight quarterly loss on Monday, hurt by higher fuel expenses and a weaker rupee.

"The airline has embarked on a comprehensive review ... The measures will include rationalisation of operations on select, uneconomic routes," Jet Airways said in a statement, adding that it will redeploy planes to more productive domestic and international sectors.

The review is expected to help deliver a more efficient and economically viable network, with a focus on profitability rather than market share, said Jet Airways, which is part-owned by Etihad Airways.

"With our clearly defined focus on profitability, we are in the midst of turning the ship around," Jet Airways chief executive officer Vinay Dube said in the statement.

A combination of rising oil prices, high fuel taxes, a weak rupee, low fares and intense competition have slashed profits in the world's fastest-growing aviation market, which is clocking 20 per cent annual passenger growth.

Competitor IndiGo, owned by InterGlobe Aviation, last month pushed back plans to take ownership of some Airbus A320neo planes to preserve cash after the company posted its first quarterly loss since 2015.

Jet Airways posted a loss of Rs 1,297 crore ($178 million) for the quarter ended September 30, compared with a Rs 49.63 crore profit a year earlier.

Fuel costs rose 58.6 per cent to Rs 2,420 crore and the airline recorded a foreign exchange loss of Rs 417 crore, up from Rs 73 crore a year ago. Revenue from operations climbed 9.5 per cent.

Jet Airways had a negative net worth as on September 30, with current liabilities exceeding current assets, the airline said.

The company said it is on track to meet its target of more than Rs 2,000 crore of cost cuts over two years, having already made savings of 5 billion rupees in the first half of the current fiscal year.

During the quarter it expanded a code share agreement with Delta Airlines, Etihad Airways, Korean Air, Malaysian Airlines and Bangkok Airways to boost revenues.

It said it continued to talk to financial stakeholders regarding its funding requirements and was working on selling assets and raising capital.

Earlier this month, a media report said Tata Group was in talks to buy a majority stake in the airline and its frequent flyer programme, JetPrivilege. Jet Airways said the report was speculative.

"We are confident that we will overcome our current challenges, honour our commitments to our stakeholders, and deliver a more strategic, efficient and financially viable airline," Mr Dube said.

Shares in Jet Airways closed nearly 6 per cent lower at Rs 242.05 apiece on the BSE, whose benchmark index Sensex finished around 1 per cent lower at 34,812, ahead of the corporate earnings announcement by the carrier.