Airlines Jet Airways accelerates turnaround strategy

The board of directors recently announced the financial results for the first quarter of FY19. A net loss of INR 1,326 crores was reported.

As a result, the persons responsible decided to consider various cost cutting measures, funding options and debt reduction. The key decisions also include the infusion of capital.

Vinay Dube, CEO, Jet Airways said: "The rise in the price of Brent fuel, a depreciating rupee and a resulting mismatch between high fuel prices and low fares have adversely impacted the Indian aviation industry, including Jet Airways.”

Regarding the difficult financial results for the first quarter of FY19, Jet Airways stated on its website, that especially macroeconomic headwinds continue to impact the overall financial performance of the carrier. Henceforth, Jet Airways worked out seven points and measures to achieve greater efficiencies of operations and to reduce costs.

• Firstly, a comprehensive cost reduction programme will be implemented, which will be adopted in the maintenance, selling, distribution, fuel rate, debt and interest cost reduction areas. Moreover, the carrier seeks to enhance the manpower productivity of the crew.
• Secondly, Jet Airways hopes to continue introducing new B737 MAX aircraft, which are more fuel and cost efficient. The aircraft will contribute to the stated 8-10% growth plan.
• Jet Airways will implement a revenue enhancement programme, which is set to deliver 3-4% growth in RASK (Revenue per Available Seat-Kilometer).
• The carrier also hopes to further improve the service and overall product. While remaining to grow on the airlines standards, Jet Airways will provide greater choice and flexibility for guests.
• A further point to fight the financial difficulties, Jet Airways seeks to leverage the 8.5m member big JetPrivilege programme
• Additionally, the balance sheet will be restructured with capital infusion and debt reduction. This is hoped to result in a significant reduction on the interest cost.
• As seventh point, Jet Airways will gradually harmonize its aircraft fleet. In a statement, the airline wrote: “Wet lease of excess ATR aircraft and simplification of sub-fleet complexity of B737s to result in further improvements to the bottom line.”

"We are implementing a host of measures to reduce costs and grow revenue, while retaining our focus on our guests. I am confident that the various transformation initiatives identified and under implementation by the Company will help in addressing the challenges faced by us. In fact, several such transformation initiatives have already started to deliver positive results,” Dube added.

Jet Airways is one of the major Indian airlines. The carrier was founded in 1992 and has operational hubs at Delhi and Mumbai. A fleet of 106 aircraft operates international and domestic flights. Eight Airbus A330s, 13 ATR 72s, 75 Boeing B737 Next Gen. and 10 B777 belong to the fleet. On FIA 2018, the airline ordered additional 75 B737 MAX aircraft, taking the backlog for the new aircraft series to 205 units.