MUMBAI (Reuters) – Indian carrier Jet Airways Ltd sought to reassure investors on Saturday, saying it is meeting its payment obligations to lenders and other dues, such as staff commitments.
FILE PHOTO: Jet Airways aircraft stand on tarmac at the domestic airport terminal in Mumbai, India September 9, 2009. REUTERS/Punit Paranjpe/File Photo
India’s biggest-full service airline issued the statement a day after its shares fell to a three-year low following an announcement that it had deferred its quarterly earnings report.
Jet, which is part-owned by Abu Dhabi’s Etihad Airways, was due to report quarterly earnings on Thursday but said in stock exchange filings that its audit committee had not signed off on them “pending closure of certain matters”.
“Our account with all the banks as on date is “Standard”,” Jet Airways said in a statement on Saturday. It said it had not been placed in any special mention accounts by the banks, referring to the name given to accounts for borrowers that are behind in their loan servicing payments.
The chairman of State Bank of India, the country’s top bank and a key lender to Jet, said on Friday that the airline’s loan is on the bank’s watch list and special mention accounts. He didn’t give details.
Jet needs to repay about 30 billion rupees ($436 million) in loans and bonds over the next three years, with a third falling due by the end of 2019, Reuters data shows.
The company has denied suggestions it told staff earlier this month it was running out of money.
On Saturday, Jet said it was working on cost and revenue initiatives to cushion the sharp rise in fuel costs and the depreciation in the Indian rupee.
“We have had scheduled amortizations in the past so many years and the company has met its repayment obligations all the time,” it said.
Airlines in India, the world’s fastest-growing major aviation market, operate on thin margins. Carriers have struggled to stay profitable despite filling nearly 90 percent of seats as they compete fiercely to keep ticket prices low to woo passengers.
Reporting by Sankalp Phartiyal and Aditi Shah; Editing by Neil Fullick