Indian Stock Market Tips- Jet Airways to stop flying on seven Gulf routes amid financial woes
The high competition and lower demand have forced the carrier to cease operations in the Gulf, which once used to be a key market for Jet Airways. At present, Abu Dhabi-based Etihad Airways own 24% equity stake in Jet Airways.
The Naresh Goyal-controlled airline Jet Airways has decided to stop flying on seven Gulf routes from this month as it struggles to raise capital to stay afloat, media reports said. The full-service carrier has decided to stop operating as many as 40 flights per week to Muscat, Doha, Dubai and Abu Dhabi from various cities.
“Jet Airways has decided to withdraw its services to Doha from Kochi, Kozhikode, and Thiruvananthapuram as well as to Abu Dhabi from Lucknow and Mangalore. Besides, the airline will also not operate on Mangalore-Dubai route. All these services are being taken out of operations from December 5,” PTI reported citing sources the development.
On Monday, shares of the company opened over 3% higher at Rs 316 per share from its previous close on BSE and touched an intraday low of Rs 306.40 in the early morning trade. At 9: 30, shares of the Jet Airways were trading at Rs 307.70, up 0.62% on BSE.
Jet Airways presently operates one flight every day each on Mangalore-Abu Dhabi, Kochi-Doha, Mangalore-Dubai, and Lucknow-Abu Dhabi routes. While the Kozhikode-Doha and Delhi-Muscat are four days per week operations, Thiruvananthapuram-Doha services are three times per week.
Meanwhile, Jet Airways confirmed the development, saying that operations on Gulf routes are being optimized to focus on connectivity at its hubs in Mumbai and Delhi instead of point-to-point connectivity. Further, the carrier said that it plans to increase frequency on routes such as Delhi-Doha, Mumbai-Doha as well as Mumbai-Dubai routes.
“Jet Airways has undertaken a comprehensive review of its network, whereby it will move capacity from uneconomical routes to more profitable ones, to more closely align the capacity offered with the demand characteristics of specific markets,” Jet Airways said in a statement.
The high competition and lower demand have forced the carrier to cease operations in the Gulf, which once used to be a key market for Jet Airways. At present, Abu Dhabi-based Etihad Airways own 24% equity stake in the domestic full-service carrier. Etihad is also among the prospective buyers for a controlling stake in the Indian company. according to some recent news reports. In June 2016, the Indian government had permitted 100% FDI in airlines with a limit that the foreign airlines cannot hold over 49% holding in the Indian airline. Rest can be held by the non-airline foreign entity.
the carrier has posted a dismal financial performance in the last three quarters. In the September quarter, ir clocked a net loss of Rs 1,261 crore, which was its third successive quarterly loss. Amid cash paucity, the full-service carrier has been defaulting on salary payments to about 15% of its workforce, primarily senior management, pilots and engineers.
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