Debt-laden carrier Jet Airways on Tuesday said that the airline is on discussion with various potential investors for capital infusion and partial stake sale in its loyalty programme, Jet Privilege.
The Naresh Goyal-led airline on Monday reported its third consecutive quarterly loss in a row, roiled by higher fuel cost that soared 59 percent, a steep rupee fall that led to a seven-fold spike in forex loss as well as airline’s inability to increase fares in the face of excess capacity and stiff competition.
“We are working towards various liquidity initiates to bridge the gap. We have engaged the services of experts to help in the turnaround plan and enhance liquidity,” deputy chief executive and chief financial officer Amit Agarwal said.
Agarwal said the company has hired investment bankers and consulting firms to carry out these tasks, adding, “six wide-body Boeing 777s have already been put on sale.”
According to reports, the airline is struggling to make payments to creditors, including aircraft lessors and salaries to a section of its over 16,000 employees.
“The rupee fell by about 10 per cent during the quarter over the same period last year while Brent jumped almost 50 percent. However, instead of witnessing an increase in fares to recover cost, the industry fares and yields are in fact down,” chief executive officer Vinay Dube said.
Such a low fare regime is not sustainable for either the industry or the consumer in the medium-term, he said adding, “it is imperative that fares rise in the short-term.”
Acknowledging that the employees are not happy with salary delays, Dube said, “almost 15 percent employees have not been receiving their salaries on time and I am sure they are less than happy. But let me add that our employees are extremely committed and dedicated.”
Meanwhile, according to reports, conglomerate Tata Sons has already started its due diligence in order to pick up a controlling stake in the airline.
“An in-house team of Tata Sons is currently conducting due diligence on Jet Airways, which is expected to continue for the next few weeks," Mint quoting a source reported, adding that the conglomerate is also keen to acquire Jet's stake in its loyalty programme, Jet Privilege.
(With inputs from agencies)