A Boeing Co. 737 aircraft operated by Jet Airways (India) Ltd. approaches to land at Chhatrapati Shivaji International Airport in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Jet Airways' Liabilities Surge After Third Consecutive Loss

(Bloomberg) -- Jet Airways India Ltd. saw both current- and non-current liabilities surge in the second quarter, after intense competition and low fares led to its third consecutive quarterly loss.

  • Current liabilities rose to 160 billion rupees ($2.2 billion) as of Sept. 30, compared with 142 billion rupees as of March 31, while non-current liabilities jumped 30 percent during the same period.

Key Insights

  • The loss at the nation’s biggest full-service carrier is the latest sign that Indian airlines are struggling to survive in a market where competition has depressed fares and high fuel prices negate gains from a surge in demand for air travel.
  • Jet Airways continues to engage with financial stakeholders to support funding requirements. It has started a review of its network, including capacity and flight frequencies, signaling some loss-making routes will be cut.
  • The Mumbai-based carrier isn’t the only one in trouble. IndiGo, the low-cost operator, reported a quarterly loss for the first time as a publicly traded company for the three months through September. SpiceJet Ltd., a budget carrier, has said it’s seeking more time to pay for leased aircraft.

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  • Jet Airways, which hasn’t made a profit in nine of the past 11 fiscal years, has been seeking to raise funds to ease a cash crunch. Last month, it said it received notices from aircraft leasing companies about late payments or contract defaults.
  • Jet Airways shares have slumped 71 percent this year, shrinking its market value to $377.5 million. Besides pledging to cut costs, the board in August proposed to pare debt and sell the carrier’s stake in JetPrivilege, a loyalty program.
  • Read more about the news here.

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