ZCZC
BCN-19
INDIA-AVIATION-ECONOMY
India’s Jet Airways has ‘two months’ to cut costs
MUMBAI, Aug 4, 2018 (BSS/AFP) – India’s Jet Airways is suffering major
turbulence and may cease flying in 60 days without major cost cuts, local
media reported Friday, sending shares in the carrier tumbling.
The dire warning was made in talks between managers and employees in
recent days, the Economic Times reported, quoting an unnamed senior
executive.
The claims, as well as another report in the Mint daily that the airline
was in talks with investors to raise cash, sent Jet Airlines’ shares down
seven percent.
Mint quoted an unidentified source who said the talks included founding
chairman Naresh Goyal potentially selling some of his 51 percent stake in
India’s number-two carrier by market share.
Etihad Airlines of the United Arab Emirates currently owns a 24 percent
stake in the firm. A previous Etihad offer to hike its stake was spurned by
Goyal, Mint reported.
Jet Airlines declined to comment on the reports when contacted by AFP.
There has been a six-fold increase in passenger numbers in India over the
past decade as customers take advantage of better connectivity and cheaper
fares thanks to a host of low-cost airlines.
But intense competition and rising jet fuel prices — exacerbated by a
weaker rupee — has eroded the profitability of airlines including Jet
Airways and Vistara, a joint venture between Singapore Airlines and Tata
Sons.
BSS/AFP/HR/1042