Amid rising concerns about its financial health, Jet Airways has deferred announcing its June quarter results. The results were expected on Thursday evening. The decision was taken after the audit committee did not recommend the results for the board’s approval “pending the closure of certain matters”, the company said in its filing to the BSE.
Earlier on Thursday at the company’s annual general meeting, addressing concerns about the airline’s financial health, Jet Airways chairman Naresh Goyal said that he was feeling “guilty” and “embarrassed” because shareholders were losing money.
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Goyal said “weakening of the Indian rupee with a consequent rise in fuel costs, industry’s inability to pass on increased costs to the consumer and no corresponding increase in ticket fares” were the main external factors for the airline’s troubles.
The spotlight first fell on the carrier’s condition when it was reported that the airline, which has the highest cost structure among the private players in the industry, had asked its employees to take pay cuts. Employee costs at JetAirways in FY18 stood at nearly Rs 3,000 crore in FY18, as against Rs 2,890 crore in the previous year—a 3.6% increase. It was also reported that the management of the airline had allegedly told its employees that it cannot fly for more than 60 days; the company would go onto say that the reports were “factually incorrect”.
The airline had to roll back its decision to cut salaries under pressure ahead of its quarterly results, people with knowledge of the matter said. “In the first week of August, the management reached out to us with the proposition of pay-cuts but we flatly refused. We have made it clear to them that we will not accept salary cuts time and again,” said an employee on condition of anonymity. He added that the management has been verbally communicating with the employees and the future course of action has not been discussed as yet.
Another employee said that the airline has been facing trouble for a long time now. “Delayed salaries or pay cut is a sign of a dead end… Some of us have been looking out for jobs,” this person said. The airline had reported a standalone net loss of nearly Rs 768 crore for FY18 as against a net profit of Rs 1,482.52 crore in FY17. As on March 31, 2018, the airline’s debt stood at Rs 8,424 crore, of which Rs 2,054 crore was aircraft related.
However, a senior company official said there was no negative sentiment among its employees, and they and the company have learned to ignore negative publicity. “An organisation the size and scale of Jet Airways is always in public eye and this brings a lot of good and bad things with it. Employee morale is high and we are communicating constantly with all stakeholders including employees,” the official claimed.