NEW DELHI/BENGALURU: India’s Jet Airways shares hit a three-year low on Friday after it deferred its earnings, prompting analysts to say it urgently needed to recapitalise and restructure.
The airline was due to report quarterly earnings on Thursday but instead told the stock exchange that its audit committee had not signed off on them “pending closure of certain matters”.
Jet Airways told staff earlier this month it was running out of money, a source had said, but it has denied this and said it is confident of cutting costs and keeping its planes flying. India is the world’s fastest-growing aviation market, but surging fuel prices, a weaker local currency and increasingly competitive air fares are hurting airlines. “Recapitalisation is critical and long overdue,” Kapil Kaul, CEO and director for South Asia at consultancy CAPA, said.
“This coupled with a very effective restructuring which reorganises the business especially the domestic business is central to stability and viability,” Kaul said.
India is one of the cheapest domestic airline markets in the world and carriers have struggled to stay profitable despite filling nearly 90 per cent of seats and seeing a more-than doubling of domestic passenger numbers over the last four years.
Jet Airways needs to repay about Rs 30 billion ($436 million) of loans and bonds over the next three years with a third of it due by the end of next year, Reuters data shows.
One of the airline’s lenders is State Bank of India , the chairman of the nation’s top bank Rajnish Kumar said on Friday. The loan features on the bank’s watch list and special mention accounts, Kumar said, without giving details. — Reuters
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