Cash-crunched Jet Airways today said it has received an additional equity of USD 300 million in the form of advance lease incentives and borrowings from domestic banks.
Cash-crunched Jet Airways today said it has received an additional equity of USD 300 million in the form of advance lease incentives and borrowings from domestic banks. The airline, which reported a second consecutive quarterly loss of over 1,300 crore in three months to June, also reiterated that both the airline and its auditors were on the same page and there was no difference of opinion. The company got an additional equity of USD 300 million from lease incentives and bank borrowings, Jet Airways deputy chief executive officer and chief financial officer Amit Agarwal today said during an analysts call post June quarter earnings.
Agarwal, however, did not give the breakup, but said, “A large proportion of it came from lease incentives.” The airline had yesterday reported a whopping Rs 1,323 crore of net losses for June quarter due to higher fuel cost, falling rupee and low fares. Total income marginally improved to Rs 6,066 crore, from Rs 5,953 crore a year ago.
Jet Airways had reported a loss of Rs 1,036 crore in March quarter. The two back-to-back losses forced the airline to draw up a revival plan, which includes capital infusion, a cost reduction programme of more than Rs 2,000 crore over two years, a plan to improve pricing, better inventory management, monetising its JetPrivilege programme and wet leasing some of its small aircraft.
The airline was earlier scheduled to announce the June quarter numbers on August 9. But after the AGM and the board meeting, it informed the exchanges that the board did not consider the accounts as the company’s audit committee was headless. Chief executive officer Vinay Dube said that there was no difference of opinion with the auditors and they continued to audit the company’s accounts.
He also clarified that June quarter results were postponed to take a call on the cost-reduction programme. Dube during the call also said that the company’s plan to induct 11 fuel-efficient Boeing 737 Max planes in the fleet by March were on track, adding that three such planes have already been delivered to the airline and two more are expected to join the fleet soon.
“Further, the induction of B737 Max will help us achieve the stated 8-10 per cent growth plan,” he said. There are three big ticket items under the comprehensive cost-reduction programme – maintenance cost, where the airline has already renegotiated contracts, sales and distribution cost and fuel optimisation, Agarwal told analysts. He also said that the airline could sell and lease back some of the 16 planes which are owned by the airline to mop up funds.
Of these, 10 are Boeing 777s, three Airbus A330s and rest Boeing 737s, he said, adding, the market value of these planes is pegged at around USD 750-800 million. “Clearly there is a large equity sitting and Jet Airways can sell and lease back a some of these planes,” he added. Agarwal said the airline’s total debt stood at Rs 8,620 crore as on June 30, adding the firm plans to phase out Rs 2,200 crore debt in this fiscal year.