Embattled Jet Airways to face Registrar of Companies

By NT Bureau Published on Aug 31, 2018 03:07 PM IST

Chennai: Financial issue trapped Jet Airways has confirmed that it has received a communication from the Registrar of Companies (RoC), following receipt of a complaint.

Without providing specific details about the communication or the complaint, the loss-making airline said it was taking necessary steps to provide the responses to the RoC, which comes under the Corporate Affairs Ministry.

On 27 August, the full-service carrier reported a net loss of Rs 1,323 crore for the three months ended June. Earlier this week, a senior official representing the airlines had said the Ministry has sought details about certain issues from them, which is also under the regulatory scanner for postponement of its June quarter results.

To a query on whether the airline has received a communication from the RoC regarding certain financial matters, an airline spokesperson replied in the affirmative.

“The company has received communication from the office of Registrar of Companies (RoC) seeking response to a compliant received by their office. The company is taking necessary steps to submit its responses in this regard,” the spokesperson said.

Jet Airways board, on 9 August, deferred announcement of unaudited financial results for the June quarter and the same was announced on 27 August. Battling financial woes, the airline is working on ways to reduce costs.

On 27 August, Jet Airways said it would monetise loyalty programme JetPrivilege and wet-lease some of its small aircraft to mobilise urgent working capital.

Against the backdrop of second back-to-back quarterly loss, the airline has announced a turnaround plan, which includes a capital infusion by selling a stake in JetPrivilege, and a massive cost cutting to save around Rs 2,000 crore over the next two years.

Cost cutting covers various areas of operations such as maintenance, sales and distribution costs, fuel bill, reducing debt to save on interest and enhancing manpower productivity with special focus on the crew, the airline said on 27 August.

Earlier yesterday, the airline informed stock exchanges that it has not received any communication till date from the Income Tax department amid reports of the department probing a land deal.

WILL TURNAROUND WORK?

Jet Airways had earlier chalked out a plan to reduce costs. The cost reduction programme involved reducing expenses worth more than Rs 2,000 crore over two years in addition to plans for better inventory management, improving pricing and monetising its well-established 8.5 million member JetPrivilege programme. The airlines had also talked about the liquidity support of $300 million in the form of advance lease incentives and borrowings from domestic banks.

ADDING FUEL TO

Controlled by Naresh Goyal, the airlines had a few quarters earlier started the process to reduce its non-fuel costs to improve its finances. The aircraft service provider said it is on track to cut non-fuel costs by 12-15 per cent over the next 18-24 months.

The carrier had a few quarters earlier started the process to reduce its non-fuel costs to improve its finances.

Earlier in August, the airline’s management asked employees to take an up to 25 per cent cut in their salaries.

Airlines in India have been hammered by higher jet fuel prices, a weaker rupee and intense competition, restricting their ability to raise fares to cover higher costs.

In the past year, Brent crude has gained 46 per cent to $76.10 a barrel, while the rupee weakened 8.73 per cent against the dollar during the period.