News
Jet Airways hires turnaround consultants and IndiGo defers ATRs
November 9th 2018
Jet Airways’ woes continue. After launching India’s first nonstop service between Mumbai and Manchester on Monday, the carrier appointed three global consultancies to help secure funding and aid its restructuring drive. Read More »
A report in India’s Live Mint this week said Jet Airways had hired Goldman Sachs Group to identify potential buyers for an equity stake in the airline, Boston Consulting Group to advise on improving the airline’s operational efficiency and McKinsey & Company to map out the development and implementation of cost reductions at the carrier.
Last month, a report in India’s Business Standard said Tata Group was evaluating an equity purchase in cash-strapped Jet Airways. Other media continues to report Air France-KLM and Delta Air Lines also are interested in buying Jet Airways equity. The carrier's 24% owner, Etihad Airways, made a capital injection of US$35 million into the airline in September.
It became clear in August that Jet Airways’ money worries were more serious than previously thought. In its first quarter to June 30, the airline recorded a net loss of INR13.2 billion rupees (US$198 million), a reversal from a 53.5 million rupee profit in the year-ago period.
The Mumbai-headquartered carrier blamed a 36% increase in fuel, a low fare environment and depreciation of the Indian rupee against the US$ for the poor performance.
Jet Airways is seeking a capital injection of up to US$400 million from a share issuance. It has a market capitalization of approximately US$450 million. For the year to March 31, the airline announced a net loss of US$90.3 million, down from an INR15 billion net gain in the previous 12 months. It has posted losses in nine of the last eleven fiscal years.
Given its increasingly precarious financial position, Jet has had to delay staff salaries and payments to lessors and other suppliers. It has grounded two A330s, a B777-300ER, two B737NGs and three ATR 72-600s.
Separately, India’s Economic Times this week said IndiGo Airlines, hailed as the wunderkind of Indian aviation because of its stellar operating performance, has asked ATR to defer delivery of several ATR 72-600s scheduled to arrive in Delhi by year end because of a shortage of cockpit crew. IndiGo has taken delivery of 12 turboprops and has 38 ATR 72-600s on firm order.
