Mumbai: Jet Airways (India) Ltd expects its business in the Middle-East and Gulf markets, where it deploys a significant portion of its international capacity, to remain under pressure, a top executive at the airline said.
The Naresh Goyal-owned airline also expects yields to remain stressed on the back of rising oil prices and flat airfares in the coming quarters.
The Gulf market hasn’t seen a sustained recovery yet, despite the rise in oil prices, Jet Airways chief financial officer and deputy chief executive Amit Agarwal said at a post-earnings analysts call on Thursday.
“We will have to wait for at least a couple of quarters more to see a sustained recovery,” Agarwal added.
Jet Airways on 23 May reported a stand-alone loss of Rs1,036 crore for the March 2018 quarter, resulting in a negative net worth at the end of the quarter.
The airline had reported a profit of Rs602.42 crore the previous year.
Jet Airways chief executive Vinay Dube, who attributed the airline’s huge quarterly loss to higher fuel price, stagnant air fares and a weak rupee, told analysts that the airline would conduct deeper cost cuts as it looks to improve yields and bring down non-fuel cost by 12-15% over time.
Dube said airfares, which have remained stagnant during the last 18-24 months despite a significant rise in fuel costs, could rise as airlines increasingly find it difficult to absorb higher costs.
“Jet Airways, which has a significant customer base comprising corporate travelers, will benefit immensely from price correction,” Dube said.
The airline, which had in April 2018 signed a new order for 75 more Boeing 737 MAX aircraft, taking the total order for such aircraft to 150, will take delivery of 11 such aircraft by March 2019, which would include delivery of two such aircraft in June 2018.
The fuel-efficient Boeing 737 Max aircraft are expected to save significantly on the airline’s fuel bill.
Jet Airways’ net debt currently stands at Rs8,149 crore, at the end of 31 March 2018.