NEW DELHI: Jet Airways has incurred a loss of Rs 1,323 crore in the April-June, 2018, quarter, while it had a profit of Rs 53.5 crore in Q1 of last fiscal. The group (including JetLite) lost Rs 1,326 crore, compared to a profit of Rs 58 crore in Q1 FY 18. Jet shares closed 2.2% higher at Rs 281.8 on BSE Monday. The results were announced after market closed. This is one of the highest ever quarterly losses posted by Jet, which recently turned 25.

“Macroeconomic factors led by an increase in Brent fuel price by more than 36%, a depreciating rupee and the resulting mismatch between high fuel prices and low fares primarily undermined Jet Airways’ performance in the quarter,” the airline said in a statement. Jet Airways’ fuel expense was Rs 2,332.5 crore, up 53% from Rs 1,524.2 crore in same quarter last fiscal. Jet Group’s total revenue increased to Rs 6,257 crore in Q1, up 5.2% from Rs 5,951 crore in same quarter FY18.

The airline is now eying a number of cost cutting and revenue enhancement moves that include selling its stake in the loyalty program, debt restructuring and equity infusion. It will also lease out some of its turboprops. Jet chairman Naresh Goyal said: “The two significant proposals considered by the board of directors (Monday) infusion of capital and the monetization of the airline’s stake in its loyalty programme bode well for the long term financial health and sustainability of the airline.”

The auditors in their report say Jet’s “appropriateness of assumption of going concern is dependent on realization of the various initiatives undertaken by the Company and its ability to raise requisite finance/generate sustainable cash flows to meet its obligations.”

The two other listed airlines also had a bleak Q1 this fiscal due to sharp rise in jet fuel price, crashing of the rupee and inability of airlines to hike fares thanks to massive capacity. IndiGo saw its profit crash 97% to Rs 27.8 crore from Rs 811.1 crore in same quarter last fiscal and SpiceJet reported a loss of Rs 38.1 crore after 13 straight profitable quarters. However, first Jet’s cash crunch and then it delaying announcement of Q1 result on August 9 have cast a shadow on the airline.

In a bid to overcome those challenges, Jet Airways board on Monday looked at various cost cutting measures, debt reduction and funding options, including infusion of capital, monetization of assets including the company’s stake in its loyalty programme. Giving details of its “turnaround strategy,” Jet said a “comprehensive cost reduction programme” will lead to savings of Rs 2,000 crores over next two years.

Cost reduction will come from maintenance, selling and distribution, fuel optimization, debt and interest cost reduction and enhancement of crew and manpower productivity. It hinges its hopes on induction of fuel efficient Boeing 737 MAX aircraft; strategic initiatives around network, pricing, inventory management and sales; product and service improvements and wet leasing excess ATR aircraft.

