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Business News/ Companies / News/  DGCA to conduct financial audit of Jet Airways

DGCA to conduct financial audit of Jet Airways

Jet Airways had on 9 August postponed declaring its Q1 results

The Directorate General of Civil Aviation (DGCA) will conduct the financial audit of Jet Airways from 27 August. Photo: Abhijit Bhatlekar/MintPremium
The Directorate General of Civil Aviation (DGCA) will conduct the financial audit of Jet Airways from 27 August. Photo: Abhijit Bhatlekar/Mint

New Delhi: The Directorate General of Civil Aviation (DGCA) is set to conduct a financial audit of Jet Airways (India) Ltd, after the Naresh Goyal-promoted airline postponed its June quarter (Q1) results, said a person familiar with the matter. The aviation regulator recently evaluated the financial health of Air India Ltd, besides conducting a special audit of Air Deccan, said this person, requesting anonymity.

The financial audit of airlines, which has been conducted in the past too, is done to assess their fiscal health and ensure that they are not compromising on safety due to financial stress.

“We will conduct the financial audit of Jet Airways from 27 August. A similar audit of Air India has been completed," the person cited earlier said.

The Naresh Goyal-promoted Jet Airways, in which Gulf carrier Etihad Airways PJSC holds 24% stake, is grappling with financial woes—its share price as a result taking a beating in recent weeks.

On 9 August, the board of directors of Jet Airways deferred the Q1 results. Market regulator Securities and Exchange Board of India (Sebi) is looking into Jet Airways’ deferring the announcement of Q1 results following reservations expressed by the airline’s audit committee.

The financial audit of Air India was necessitated as the airline has defaulted on salary payments to its employees for five months in a row, besides grounding a number of aircraft due to payment issues with vendors. The loss-making national flag carrier, which failed to attract any buyer earlier this year, is also facing a cash crunch and is awaiting additional funding from the government.

DGCA carried out a special audit of Air Deccan and will soon be conducting a similar exercise on Air Odisha, following orders from the aviation ministry, the person said. The two carriers, which together have been mandated to fly on 84 routes under the government’s UDAN regional connectivity scheme, recently cancelled a number of flights, citing shortage of pilots and technical glitch in their aircraft, the person said.

ALSO READ | Jet Airways under pressure from India’s budget flight boom

UDAN is short for Ude Desh ka Naam Nagrik, which roughly translates to “Let every Indian fly".

Air Deccan had started operations in December last year while Air Odisha took to the skies in February this year. The Ahmedabad-based GSEC Aviation and Monarch Networth Capital had last year acquired 100% stake in Air Deccan and 60% in Air Odisha.

PTI contributed to this story.

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Updated: 13 Aug 2018, 10:12 AM IST
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