Mumbai: Directors of Jet Airways (India) Ltd will consider a plan to turnaround the financially-troubled carrier at a meeting on 27 August.
The airline’s board will also discuss ways to cut costs at the meeting, which will consider the deferred financial results for the June quarter, Jet Airways said in a regulatory filing on Wednesday.
The announcement will help to partly assuage investor concerns about the company, which is owned 24% by Etihad Airways of Abu Dhabi.
Jet Airways had on 9 August postponed announcing earnings for the three months ended 30 June. It had then said that the chairman of its audit committee informed the board at its meeting that day that the management needed further time to finalize the accounts. The company has been linked to several potential fund-raising plans. Mint on 3 August reported that Jet Airways has approached investment bankers again to help sell a stake in the carrier. On 20 August, Mint said Jet Airways is seeking to sell a stake in the Jet Privilege frequent-flier programme to raise cash for its loan repayment obligations and also for operational needs.
The past two quarters have seen local carriers hammered by higher jet fuel prices, a weaker rupee and intense competition hampering their ability to raise fares sufficiently to cover the higher costs. This has resulted in airlines reporting either a loss or lower profits in the June quarter.
Profit at InterGlobe Aviation Ltd, which runs IndiGo, the largest domestic carrier by market share, fell by a record 97% last quarter.
Budget airline SpiceJet Ltd plunged to an unexpected first loss in 14 quarters of ₹ 38.06 crore in the three months ended 30 June, from a year-earlier net profit of ₹ 46.1 crore. The loss resulted from a one-time expense to make a provisioning for paying off the Marans, the previous owners of the airline, higher fuel prices and foreign currency loss. Jet Airways is also expected to report a loss for the June quarter on the back of higher costs, according to analysts.
“Jet’s cost structure/debt levels have improved considerably, but it needs to do more because of intense competition in the industry," SBI Cap Securities said in a 16 July report. The Mumbai-based airline narrowed its net debt to ₹ 9,104.18 crore in the last financial year, from ₹ 10,191.38 crore, according to Bloomberg data.