Nov 13: Jet Airways, the Indian international carrier based in Mumbai, has been grabbing headline space of late for facing a lot of financial issues. The latest on that terrain is that the carrier is looking to reduce the number of flights on less profitable routes and increase services on the profitable ones. This is as part of its plans to reduce the prices and increase the income.
The carrier which got hit by the rising fuel prices and declining rupee value, has now announced its third consecutive losses. It announced that the number of flights to uneconomic routes will be cut down while more flights will be set for economic routes. The company is to concentrate more on profitability rather than on market share.
Vinay Dube, Chief Executive Officer at Jet Airways, in a statement that was reported by the media, said that the company is trying to get things right and is concentrating on profitability. The increasing oil prices, fuel taxes, reduced travel fares, weak rupee value, and the competitive market together hit the world’s fastest-growing aviation market.
Jet’s rival IndiGo, which had plans to buy Airbus A320neo planes, has also backed out. In the year 2015, the company had announced its first quarterly loss.
Last year Jet had a profit of Rs 496.3 million but it posted a loss of Rs 12.97 billion ($178 million) in the quarter which ended on September 30. A foreign exchange loss of Rs 4.17 billion was listed by Jet when the fuel costs rose to Rs 24.2 billion.
As on September 30, Jet Airways, with current liabilities exceeding current assets, has a negative net worth in the market. In order to boost the revenue, the company in this quarter expanded its codeshare agreement with Delta Airlines, Etihad Airways, Korean Air, Malaysian Airlines and Bangkok Airways.
As per the company statements, they are in talks with the stakeholders about the financial needs and have plans to sell the assets and increasing the capital.
According to a recent report, Jet Airways was in talks with Tata Group to buy a major stake in Jet Airways and JetPrivilage, its frequent flyer programme. Jet Airways denies the news and says that the report is groundless.