Jet Airways Chairman Naresh Goyal has urged employees to take a relook at all costs and strengthen revenue in the face of unknown challenges next year. In a New Year mail to employees, Goyal also said the airline would rationalise operations and open new routes.
“This is a time when there is a global pause to take stock, chart fresh resolves and shore up courage to face the unknowns of the New Year. There are bound to be many (unknowns) in an industry as dynamic and globally competitive as ours. Stronger then, should be our resolve to relook at all costs and rebuild our yields and revenue,” he wrote.
In the first half of FY19, Jet made losses of over Rs 25 billion, while its year-on-year revenue growth was only 3.5 per cent. The revenue growth has been slower than capacity induction, indicating intense pricing pressure. The airline is targeting Rs 20 billion worth of cost savings over the next two years.
Over the past few months, the airline has delayed salaries and vendor payments, cut down on network and laid off staff. It is looking to restructure debt of over Rs 80 billion and seeking fresh capital. It is discussing debt recast and fund infusion with State Bank of India and strategic partner Etihad Airways.
Though the New Year message does not mention fundraising plans, it acknowledges the challenges faced by the airline. “Without doubt it has been a tough year for all of us. It has been a challenging year globally,” Goyal wrote, citing issues like Brexit, Sino-US trade war and “evolving political scene across our nation”.
He said the airline would continue to rationalise operations and open new routes like Mumbai-Manchester and Pune-Singapore. The airline is withdrawing flights to nine destinations in India and West Asia from February, while adding new services from its hubs in Mumbai and Delhi.
Jet said its European network was performing well and the cargo business was generating higher yield than rivals. “Our London route remains our premium revenue earner. We are focusing on Amsterdam and Paris routes to heighten passenger loads and enhance yields in a highly competitive market,” Goyal said.
Last year, Jet tied up with Air France-KLM, Delta and Virgin Atlantic, offering additional onward connections in Europe and the US. The tie up coincided with the launch of its flights from Chennai-Paris and Bengaluru-Amsterdam.