Jet Airways slid 8.04 percent in morning trade, a day after it told the Bombay Stock Exchange that it was delaying releasing its first-quarter results
Mumbai (AFP) - Shares in India’s Jet Airways tumbled to a three-year low on Friday after the embattled airline failed to release its latest quarterly earnings as scheduled.
Local media have raised concerns about India’s second-largest carrier, reporting it may cease flying in two months unless it makes major cost cuts.
Jet’s stock has plunged 66 percent this year, according to Bloomberg News, as it grapples with intense competition from a host of low-cost airlines, rising fuel prices and a weak rupee.
“Lots of shareholders have lost money, I feel guilty and embarrassed,” Jet Airways Chairman Naresh Goyal told the company’s annual general meeting in Mumbai late Thursday.
The airline’s shares slid 8.04 percent in morning trade, a day after it told the Bombay Stock Exchange that it was delaying releasing its first-quarter results until an unspecified date, “pending closure of certain matters”.
In the statement, Jet said it had postponed its financial results because the audit committee hadn’t recommended the results for board approval.
Last week the Economic Times reported that Jet needs to make major cost cuts or face having to shut down operations within 60 days.
Indian financial daily Mint reported that the airline was in talks with investors to raise cash.
Jet Airways, India’s number-two carrier by market share, denied that it needed to take drastic measures. In a statement, CEO Vinay Dube described the reports as “factually incorrect and malicious”.
India’s aviation market is witnessing a boom with passenger numbers increasing six-fold over the past decade as customers take advantage of better connectivity and cheaper fares.
But it is also a tumultuous time, with profits being eroded by a poorly performing Indian currency and high crude prices.
Airlines are navigating a fiercely competitive market and are unable to pass on rising operating costs to cost-conscious customers, analysts say.
They are also having to spend considerably to increase their fleets to keep up with soaring demand.
“Net margins have fallen drastically and wiped out profits,” Binit Somaia, South Asia director at the Centre for Aviation (CAPA), told AFP.
Last month IndiGo, India’s biggest airline, reported a whopping 97 percent plunge in quarterly profits compared to the same period a year ago.
And an attempt by the Indian government to sell off debt-stricken national carrier Air Indian failed earlier this year, after no offers were made.