ZCZC
BCN-35
INDIA-AIRLINE-ECONOMY-JET
Jet Airways share slump after debt payment failure
MUMBAI, Jan 2, 2019 (BSS/AFP) – Shares in India’s second-largest airline Jet
Airways fell five percent Wednesday after the company admitted it had failed
to meet debt payments to banks.
The airline hit turbulence last year after failing to report its quarterly
earnings or pay its staffers including pilots in August.
Subsequently, chief executive Vinay Dube released the earnings and
announced a cost cutting programme amounting to 20 billion rupees ($280
million) over the next two years.
“Payment of interest and principal installment due to the consortium of
Indian Banks on 31st December 2018 has been delayed due to temporary cashflow
mismatch,” the struggling airline said in a statement.
Jet added that it was in talks with the consortium led by State Bank of
India (SBI).
After reporting a loss of $178 million for July-September, the carrier
announced last November that it would cut flights on less profitable routes
as part of a plan to reduce costs.
Dube has also sought investment to help turn around the firm’s fortunes,
having seen millions of dollars wiped off its market capitalisation
throughout 2018.
According to reports, the Tata Group had reviewed Jet’s accounts to
potentially buy a stake. Tata already operates Vistara in partnership with
Singapore Airlines and AirAsia India with AirAsia Group.
India’s aviation sector is projected to become the world’s third-largest by
2025.
But fluctuating global crude oil prices, fierce competition, a weak rupee
and price wars have hit the country’s carriers including the largest airline
by market share, IndiGo, and loss-making national carrier Air India.
India’s passenger numbers have grown six-fold over the past decade as the
economy has powered ahead.
Jet Airways shares were trading at 267 rupees as compared to 283.95 rupees
a day earlier on Mumbai-based Bombay Stock Exchange(BSE).
BSS/AFP/SR/1930 HRS