The Jet Airways stock fell in early trade today amid reports which said the airline would be unable to fly beyond 60 days unless cost-cutting measures including pay cuts are put in place, and it has approached investment bankers again to help sell a stake in the carrier.
At 10:31 am, the stock fell 4.21% or 14 points to 317.25 level.
The stock has fallen after two days of consecutive gains.
The small cap stock fell 5.72% intra day to 312.25 level on the BSE.
It has fallen 46.07% during the last one year. The stock is down 61.88% since the beginning of this year.
According to a report by The Economic Times, the management team, including Chairman Naresh Goyal, has informed employees in face-to-face meetings in recent days in Mumbai and Delhi that the airline's financials are in a bad shape and drastic measures needed to be taken to cut costs.
Jet Airways is the latest airline to feel the pinch of rising crude prices and a falling rupee. The airline has informed its employees that they will have to take a 25% salary cut due to rising operational expenses. The salary cut is from 5% for employees earning Rs 12 lakh per annum to 25% for employees earning up to Rs 1 crore. Salary cuts for pilots are going to be in the range of 17%.
Meanwhile, Mint reported that Jet Airways has approached investment bankers again to help sell a stake in the carrier.
According to the report, the airline was looking to raise immediate cash and the transaction could include Jet Airways founder Naresh Goyal selling a part of the promoter's stake in the company.
Jet Airways saw profits in two consecutive years - fiscal 2016 and 2017 - but saw losses of Rs 76 crore in FY 2018. The airline is not alone in this. IndiGo reported a 97% drop in profits in the April-June period from the year-ago quarter.
Jet Airways, which completed 25 years of operations earlier this year, had 16,558 permanent employees as on March 31, 2018.
Besides, there were a total of 6,306 temporary/casual employees, as per the airline's annual report for 2017-18.
Written and edited by Aseem Thapliyal