Reuters :
India’s Jet Airways shares hit a three-year low on Friday after it deferred its earnings, prompting analysts to say it urgently needed to recapitalise and restructure.
The airline was due to report quarterly earnings on Thursday but instead told the stock exchange that its audit committee had not signed off on them “pending closure of certain matters”.
Jet Airways told staff earlier this month it was running out of money, a source had told Reuters, but it has denied this and said it is confident of cutting costs and keeping its planes flying.
India is the world’s fastest-growing aviation market, but surging fuel prices, a weaker local currency and increasingly competitive air fares are hurting airlines.
“Recapitalization is critical and long overdue,” Kapil Kaul, CEO and director for South Asia at consultancy CAPA, said.
“This coupled with a very effective restructuring which reorganises the business especially the domestic business is central to stability and viability,” Kaul said.
India is one of the cheapest domestic airline markets in the world and carriers have struggled to stay profitable despite filling nearly 90 percent of seats and seeing a more-than doubling of domestic passenger numbers over the last four years.
Jet Airways needs to repay about 30 billion rupees ($436 million) of loans and bonds over the next three years with a third of it due by the end of next year, Reuters data shows.
India’s Jet Airways shares hit a three-year low on Friday after it deferred its earnings, prompting analysts to say it urgently needed to recapitalise and restructure.
The airline was due to report quarterly earnings on Thursday but instead told the stock exchange that its audit committee had not signed off on them “pending closure of certain matters”.
Jet Airways told staff earlier this month it was running out of money, a source had told Reuters, but it has denied this and said it is confident of cutting costs and keeping its planes flying.
India is the world’s fastest-growing aviation market, but surging fuel prices, a weaker local currency and increasingly competitive air fares are hurting airlines.
“Recapitalization is critical and long overdue,” Kapil Kaul, CEO and director for South Asia at consultancy CAPA, said.
“This coupled with a very effective restructuring which reorganises the business especially the domestic business is central to stability and viability,” Kaul said.
India is one of the cheapest domestic airline markets in the world and carriers have struggled to stay profitable despite filling nearly 90 percent of seats and seeing a more-than doubling of domestic passenger numbers over the last four years.
Jet Airways needs to repay about 30 billion rupees ($436 million) of loans and bonds over the next three years with a third of it due by the end of next year, Reuters data shows.
