The woes of the airline industry continue to haunt investors on D-Street, with one of the sector’s top airlines in the news again for all the wrong reasons.
Jet Airways Founder Chairman Naresh Goyal yesterday said he felt “guilty and embarrassed” as a lot of shareholders have lost their money, amid the airline’s shares plummeting on financial troubles.
Shares of the full-service carrier touched a 52 week low of Rs 258 on today morning’s market pre-opening trade, down roughly 14% intraday as the company deferred announcing its June quarter numbers on Thursday.
Addressing shareholders at the company’s annual general meeting here, Goyal said competition, as well as fuel prices, are on the rise.
“Lots of shareholders have lost money, I feel guilty and embarrassed,” he said.
From its 52-week high price of Rs 883.65 scaled on January 5th, 2018, shares of the company have tumbled 70% in pre-opening trade, recovering slightly during days’ trade hovering around the Rs 280 mark.
Goyal said key external factors that slowed down the airline’s momentum were weakening of the Indian rupee, around 16 percent increase in Brent crude rates with a consequent rise in fuel costs and the industry’s inability to pass on increased costs to the consumers.
In addition, there was a considerable increase in maintenance, landing and navigation costs (collectively known as airport charges) during the year, he said.
According to him, operationally the airline took every step possible to maintain a sharp focus on costs and worked to reduce net debt.
“We are committed to strengthening our relationship with Etihad, We will continue to grow (together),” he said.
Meanwhile, in a regulatory filing, Jet Airways today said its board deferred considering the results for the quarter ended June 30, resulting in a sharp decline in share price in today’s trade.
The audit committee did not recommend the financial results to the board for its approval, pending closure of certain matters.
Amid rising concerns over the airline’s financial health and proposed salary reductions for employees, the Jet Airways chairman said a new committee would be set up to improve public perception and negative publicity about it.
“Now there is a feeling that Naresh Goyal family is running the airline. All these perceptions which have been created in the marketplace are going to be corrected. A new executive committee would be formed, and chaired by the airline’s directors Naseem Zaidi & Ashok Chawla,” Goyal said.
Besides, the airline is looking at cooperation with Air India in terms of engineering and flight operations. Several meetings have also been held with Air India Chairman and Managing Director Pradeep Singh Kharola, he said adding, they agree that there are common problems whether it is cost or fares.
Last week, reports emerged the airline was planning pay cuts for pilots, engineers and employees. On this issue, CEO Vinay Dube said, “We are looking at multiple elements of restructuring and payroll is one of them. We are in deep dialogue with our staff and they are extremely supportive of our restructuring plans’. In that, we will make the best decision in the interest of the company and the employees”.