Jet Airways expects to return to profit by the middle of financial year 2017, its executives told analysts on Wednesday, a day after the airline posted a massive loss of over R4, 000 crore, its highest ever, for the recently concluded fiscal.
“We have chalked out a map which involves fleet integration. The operations of the airline are expected to stabilise by the middle of FY17,” Jet Airways' V-P, finance, N Ravichandran told analysts. The airline had on Tuesday posted a record loss of R2,154 crore for the March quarter, as compared to R496 crore it posted in the same period of the previous year, due to impairment of R700 crore set aside by the airline, along with increases in fuel expense and aircraft lease rentals.
Its revenue from domestic operations in the fourth quarter, comprising 43.3% of the total revenue, stood at R2,026 crore while that of international operations stood at R2,653 crore. “We need to take measures to ensure our success in this competitive industry. There can be no short-term solutions. The changes will take time to implement,” chairman Naresh Goyal said after the results. "Our first priority on the journey to profitability will be to establish a more solid financial foundation,” he had added without elaborating.
Airline officials on Wednesday indicated that 'stringent measures' would include network restructuring, which over three years would include consolidation of domestic networks. It plans to increase ancillary revenue by imposing penalties on ticket cancellations, implementing payment for seat selection in economy class, allowing on spot upgrade to business class, and charging for excess baggage. India's second largest airline by market share will also render third party services to other airlines by providing personnel for security, training and engineering.
An official of Jet Airways told FE that in the next few quarters, while the non-profitable sectors will be scra-pped, capacity increment could be seen on routes with high demand. The airline is also pursuing opportunities to sell unutilised aircraft.