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Jet Airways stock falls amid reports of financial crisis, staff salary cut

At 10:31 am, the stock fell 4.21% or 14 points to 317.25 level. The stock has fallen after two days of consecutive gains.

twitter-logo BusinessToday.In        Last Updated: August 3, 2018  | 11:39 IST
Jet Airways stock falls amid reports of financial crisis, staff salary cut

The Jet Airways stock fell in early trade today amid reports which said the airline would be unable to fly beyond 60 days unless cost-cutting measures including pay cuts are put in place, and it has approached investment bankers again to help sell a stake in the carrier.

At 10:31 am, the stock fell 4.21% or 14 points to 317.25 level.

The stock has fallen after two days of consecutive gains.  

The small cap stock fell 5.72% intra day to 312.25 level on the BSE.  

It has fallen 46.07% during the last one year. The stock is down 61.88% since the beginning of this year.

According to a report by The Economic Times, the management team, including Chairman Naresh Goyal, has informed employees in face-to-face meetings in recent days in Mumbai and Delhi that the airline's financials are in a bad shape and drastic measures needed to be taken to cut costs.

Jet Airways is the latest airline to feel the pinch of rising crude prices and a falling rupee. The airline has informed its employees that they will have to take a 25% salary cut due to rising operational expenses. The salary cut is from 5% for employees earning Rs 12 lakh per annum to 25% for employees earning up to Rs 1 crore. Salary cuts for pilots are going to be in the range of 17%.

Meanwhile, Mint reported that Jet Airways has approached investment bankers again to help sell a stake in the carrier.

According to the report, the airline was looking to raise immediate cash and the transaction could include Jet Airways founder Naresh Goyal selling a part of the promoter's stake in the company.

Jet Airways saw profits in two consecutive years - fiscal 2016 and 2017 - but saw losses of Rs 76 crore in FY 2018. The airline is not alone in this. IndiGo reported a 97% drop in profits in the April-June period from the year-ago quarter.

Jet Airways, which completed 25 years of operations earlier this year, had 16,558 permanent employees as on March 31, 2018.

Besides, there were a total of 6,306 temporary/casual employees, as per the airline's annual report for 2017-18.

Written and edited by Aseem Thapliyal

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