Jet Airways to restructure debt, talking to bankers: Goyal
Jul 23 2014 , New Delhi
"We are looking at a lot of consolidation (of our fleet)," Jet's Chairman Naresh Goyal said at a press event in New Delhi on Wednesday. Goyal said the carrier is talking to its bankers, without giving details of the discussions.
Like all but one of India's major airlines, Jet, partly owned by Gulf carrier Etihad Airways, is losing money fast, beset by high costs, low fares and cut-throat competition in its domestic market.
While rising numbers of Indians have taken to air transport, domestic operators have struggled to translate that into profits. Indian airlines lost a combined $1.3 billion in the year to March, according to estimates from the Centre for Asia Pacific Aviation consultancy.
Jet, which has not reported an annual profit since 2007, set out a three-year restructuring plan in May centred on cutting costs and boosting efficiency. As the carrier struggles to turn around its fortunes, it also named Cramer Ball as its fourth chief executive within the space of a year, pending regulatory approvals.
Jet said on Wednesday its plans would return it to profitability in 2017 fiscal, without disclosing details of how the plans would be effective. The carrier said it would also expand its international operations, which are currently profitable, to 63% of its business by 2016 from 45% today.
Goyal was speaking at an event in New Delhi alongside James Hogan, chief executive of Abu Dhabi's Etihad, which became the first foreign airline to invest in an Indian carrier when it bought a 24% stake in Jet last year for around $330 million.
Despite Jet's losses, Etihad's Hogan said he is confident about the airline's future. "This is not an overnight turnaround," said Hogan.
"This doesn't happen overnight," Hogan said. "The investment is there, the game plan is in place. Now it is about delivering."
Jet said in May it had no plans for now to raise more equity and most of its future fund-raising would be in debt, despite the mounting losses.