Jet Airways’ board considers fund raising measures and accelerates turnaround strategy

    Jet Airways board of directors considered (27-Aug-2018) various cost cutting measures, debt reduction and funding options, including infusion of capital, monetisation of assets including the company’s stake in its loyalty programme. The management has been tasked to “take this forward and accomplish it in a time-bound manner”. The carrier acknowledged the challenging business environment and noted that it has been implementing additional measures to reduce costs and achieve greater efficiencies of operations as follows:

    • Comprehensive cost reduction programme: Will result in an excess of INR20 billion (USD285.9 million) of cost reduction over the next two years. The cost reduction programme covers various facets of the company’s operations including maintenance costs, selling and distribution costs, fuel rate and optimisation, debt and Interest cost reduction and enhancement of crew and manpower productivity;
    • Induction of Boeing 737 MAX aircraft: Contributing to the stated 8%-10% growth plan;
    • Revenue enhancement programme: Delivering 3%-4% growth in RASK through tactical and strategic initiatives around network, pricing, inventory management and sales;
    • Product and service improvements: Provide choice and flexibility to guests in line with global best practices and standards
    • Leveraging the well established 8.5 million member JetPrivilege programme;
    • Balance sheet restructuring: Capital infusion and debt reduction to result in significant reduction in the interest cost;
    • Fleet simplification: Wet lease of excess ATR aircraft and simplification of sub fleet complexity of 737s to result in further improvements to the bottom line.

    Jet Airways chairman Naresh Goyal noted: “The two significant proposals considered by the Board of Directors today i.e. infusion of capital and the monetisation of the airline’s stake in its Loyalty programme bode well for the long term financial health and sustainability of the airline”. [more – original PR]