MIAMI — Indian Carrier Jet Airways continues to be in deep financial troubles, having enough cash to keep operating for another 60 days, some analysts say.
The carrier’s economic woes have intensified because of the continuous spike in jet fuel prices, as well as the weakening of the Rupee.
Jet Airways has asked its workers to take pay cuts, which will be done alongside other cost-cutting measures.
According to a report from the Times of India, the airline had reached out to banks in an attempt to secure an influx of cash to help them.
However, the report stated that banks had refused to lend the airline money unless the could show a commitment of a turnaround.
Pilots to take a pay cut
The airline’s pilots have refused to take the 15% wage reduction for the next two years.
This is a move that the airline applied to junior pilots in July 2017, when it asked them to take a 30-50% salary cut.
Pilots Unions have asked the airline’s Flight Crew members to ‘cooperate’ with the airline, as this is going to be a part of a greater ‘financial solution.’
In a statement, Jet Airways declared that “the airline is committed to creating a growth-oriented, sustainable future and a revitalized guest experience armed with the addition of 225 B737 MAX fuel-efficient aircraft which will be inducted in its fleet over the next decade, and of which 11 are slated to join within this financial year.”
“The airline refutes and strongly condemns the speculative comments of/from certain vested interests, who are making deliberate attempts to undermine Jet Airways’ transformation efforts.”
New Planes, More Debt
Last month, during the Farnborough International Air Show, Jet Airways signed a purchase agreement with Boeing for an additional 75 Boeing 737 MAX 8 aircraft, reaching to a total of 225 brand-new jets.
The deal is worth $8.8 billion at list prices.
Naresh Goyal, Chairman of Jet Airways, said during the purchase announcement that “Our latest order for 75 additional Boeing 737 MAX aircraft reflects our long-standing association with Boeing and reposes our faith in the aircraft they manufacture.”
However, Goyal didn’t make reference to his airline’s current economic state, which will undoubtedly be affected by this $8.8 billion responsibility in new airplane rights.
As of March 2018, Jet Airways had a net debt of 81.5 billion Rupees (approximately $1.2 billion).
No Help from Partner Etihad?
While Etihad owns 24% of Jet Airways’ stock, the Abu Dhabi-based carrier is in no position to help.
Etihad is currently enduring a heavy restructuring process after it reported losses earlier this year.
And much similar to what Jet Airways is trying to do with its pilots, Etihad allowed some of its flight crews to transfer over to Emirates for as long as two years.
According to an internal memo from Etihad, its pilots can now fly for Emirates and receive full benefits and salaries but would have to take a leave of absence from Etihad.
But if Jet Airways were to end up going bust, it would be the third airline in Etihad’s portfolio—after Air Berlin and Alitalia—to represent a tremendous failure. Air Berlin disappeared last year, and Alitalia is no longer part of Etihad’s investment holdings.