Mumbai/New Delhi: Jet Airways expects to return to profit in 18 months, following implementation of a new route network and fleet strategy and cost optimisation measures, the senior management said on Wednesday.
Jet’s net worth has turned negative despite Rs 2,057 crore in equity infusion from Abu Dhabi, United Arab Emirates-based Etihad Airways last year. The company has no plan to raise equity further. Fundraising will mostly be through debt, including securing the second tranche of a soft loan of $150 million by the end of June from Etihad, the airline has said. It might also refinance costly rupee debt with cheaper dollar one. Currently, $1.4 billion of Jet’s debt of $1.765 billion is in foreign currency.
On Tuesday, Jet announced corrective measures after reporting a record Rs 2,465 crore loss for the quarter ended March, the worst ever in a quarter by a private airline in the country. The airline said the loss was aggravated because of impairment of Rs 700 crore on account of erosion of subsidiary JetLite’s net worth and another Rs 800 crore in one-off costs and provisions related to maintenance of engines. A weaker rupee against the dollar, higher airport charges and more aircraft on ground also contributed to the loss. For the year ended March, Jet’s loss was Rs 4,129 crore.
N Ravichandran, vice-president (finance), told analysts the airline had no surplus aircraft on ground and had leased its wide-bodied planes to Etihad and Turkish Airways.
Read news in full 29/05/14 Business Standard
Jet’s net worth has turned negative despite Rs 2,057 crore in equity infusion from Abu Dhabi, United Arab Emirates-based Etihad Airways last year. The company has no plan to raise equity further. Fundraising will mostly be through debt, including securing the second tranche of a soft loan of $150 million by the end of June from Etihad, the airline has said. It might also refinance costly rupee debt with cheaper dollar one. Currently, $1.4 billion of Jet’s debt of $1.765 billion is in foreign currency.
On Tuesday, Jet announced corrective measures after reporting a record Rs 2,465 crore loss for the quarter ended March, the worst ever in a quarter by a private airline in the country. The airline said the loss was aggravated because of impairment of Rs 700 crore on account of erosion of subsidiary JetLite’s net worth and another Rs 800 crore in one-off costs and provisions related to maintenance of engines. A weaker rupee against the dollar, higher airport charges and more aircraft on ground also contributed to the loss. For the year ended March, Jet’s loss was Rs 4,129 crore.
N Ravichandran, vice-president (finance), told analysts the airline had no surplus aircraft on ground and had leased its wide-bodied planes to Etihad and Turkish Airways.
Read news in full 29/05/14 Business Standard
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