The decision by Naresh Goyal-promoted Jet Airways to defer the delivery of aircraft and

RELATED ARTICLES Jet Airways rise over 3% on fund raising plan

high aircraft lease rentals have pulled the company in to red for the first quarter ended June 30, 2009. Jet Airways suffered a loss of Rs 225.33 crore during the April-June 2009 quarter as compared to profit of Rs 143.38 crore in same period previous year.

Total income of the company also declined by 17 per cent to Rs 2,371.21 crore as compared to corresponding quarter previous year.

A decision taken by Jet Airways in 2005 to acquire more Airbus 330s and Boeing 777s and another decision to defer the delivery of some of those this year, mainly due to due to economic downturn is proving to be a dampener. The company’s interest and finance charges, which is part of the aircraft acquisition cost has gone up by 81 per cent to Rs 243.60 crore in the April-June 2009 quarter from RS 134.62 crore in the same period in 2009-10. Aircraft lease rentals have also gone by 39 per cent to Rs 209.16 crore.

As a result, the company has decided reschedule the delivery of five Airbus 330s and three Boeing 777s this financial year, a senior official said. In 2005, Jet Airways had placed an order for 15 Airbus A330s, out of which 10 have joined the fleet and the rest were to be delivered this financial year. Also in 2005, Jet had placed an order for 10 Boeing 777 aircraft with an option for 10 more.

So now, the board of directors of Jet Airways has decided to raise additional capital to the extent of $400 million, subject to necessary approvals, the company told the Bombay Stock Exchange (BSE) on Friday. On July 23, Financial Chronicle had reported that the company would raise around $350 million capital, possibly through global depository receipts.

Jet may use the proceeds to buy aircraft and pay money due to oil marketing companies like Bharat Petroleum and Hindustan Petroleum Corporation Ltd. As on the March 31, 2009, Jet Airways owed these companies Rs 688 crore.

During the quarter, the company gained from foreign exchange, which rose significantly to Rs 25.66 crore from a loss of Rs 2.63 crore in the same period in 2008-09.

"The company has implemented cost control measures and rationalisation of routes to be able to compete in a dynamic environment, all of which would result in arresting losses incurred,” Jet Airways said in an announcement to the BSE.

On Friday, Jet’s stocks rose 0.43 per cent to close at Rs 247 per share at the BSE.