Jet Airways (JAI, Mumbai International) has announced a INR20 billion rupee (USD285 million) cost-cutting drive amid a rapidly deteriorating financial situation.
The cost-cutting programme is planned for two years and includes trimming the airline's maintenance, sales, and distribution expenses, fuel costs, restructuring debt and interest payments, as well as an increase in crew productivity rate.
The airline's turnaround plan also includes planned revenue enhancement actions and improvements in product and services quality.
Jet Airways also said it would simplify its B737 fleet. According to the ch-aviation fleets module, the Indian carrier currently operates sixty-seven B737-800s, two B737-900s, four B737-900(ER)s, and two B737-8s. It is also in the process of adding two B737-700s from its subsidiary JetLite. The airline has a further 125 B737-8s on order directly from Boeing. The MAX aircraft will replace the older B737s and also deliver savings on fuel expenses for Jet Airways.
The airline also said it would wet-lease out excess ATR - Avions de Transport Régional turboprops but did not give a specific number. Jet Airways currently operates fifteen ATR 72-500s and three ATR 72-600s.
Additionally, Jet Airways said it would try to sell its loyalty programme, JetPrivilege, and raise extra capital from the market. It did not give an estimation of how much money it needs. Earlier media reports speculated that the carrier would need an additional USD350-400 million to stay solvent.
The announcement of the cost cuts accompanied the delayed publication of the airline's financial results for the quarter ended on June 30, 2018. Jet Airways initially planned to announce the results in early August, but delayed it for unspecified reasons. Between March and June 2018, the carrier lost INR13.3 billion (USD190 million) net.
The carrier had a total debt of INR81.5 billion rupees (USD1.2 billion) as of March 31, 2018.
