Jet Airways, India's most-loved airline at a time, reported a wider loss for the September quarter in its most recent regulatory filing. The airline ceased operations in 2019, but for some time now, the Kalrock-Jalan consortium - Jet's new owners - have been attempting to resurrect the airline while navigating the various challenges that have arisen as a result of its troubled past.
Challenges During Pandemic
The COVID-19 pandemic has caused a significant drop in passenger demand. Domestic travel dropped from 140 million in FY20 to 53 million in FY21. Because of this, airlines were forced to ground 50%-70% of their fleets and fly half-empty planes, resulting in massive losses. IndiGo, the country's largest airline, reported a nearly 60% drop in revenue from flights in the fiscal year 2021.
Jet Airways reported a standalone net loss of around 308,000,000 (around $38 million) in the September quarter on Friday. Jet's total income decreased in this quarter when compared to the same period last year, with this year's total of 135,200,000.
The airline's performance in the same quarter last year was slightly better, with a net loss of around $37.8 million and a total income of around $5.5 million. According to the airline's filing, "the company continues to incur losses, resulting in an erosion of its net worth, and its current liabilities exceed current assets as of September 30, 2022."
The airline also stated that it was unable to provide consolidated financial results because the team is having significant difficulty obtaining relevant data from the aforementioned subsidiaries, as well as because there is no KMPs/senior management personnel available to obtain relevant information for the preparation of the company's consolidated financial results.
Operation yet to resume
Jet Airways received DGCA approval in May, granting the carrier the critical AOC. It was hoped that it would begin operations a few months later, but no official announcement has yet been made.
Nothing like this has ever been done before, and as a result, Jet's new owners have no precedent to draw from. The airline's management appears to have a lot on its plate, from negotiating aircraft and engine deals to dealing with a number of financial obligations from its previous tenure.
Its relaunch plans are likely to be pushed back even further because Jet must pay not only its lenders but also former employees.
According to CNBC-TV18, Jet is facing two payment deadlines. The first ended on November 11th, with approximately $6.4 million paid to former employees, and the second ended on November 16th, with nearly $23 million paid to various lenders.
This is according to the consortium's own declaration, which stated that its resolution plan would go into effect on May 20th, 2022, and that it intended to pay its employees within 175 days and lenders within 180 days of that date.