Full service airline Jet Airways hit another air pocket on Tuesday as its short-term and long-term loan facilities were further downgraded by rating agency ICRA for the third time in less two years.

ICRA downgraded credit ratings on Jet Airways’ short-term and long-term loan facilities citing weakened financial performance as the airline is unable to pass on the rise in jet fuel prices to customers.

“The company has large debt repayments due over FY2019 (₹3,120.3 crore), FY2020 (₹2,444.5 crore) and FY2021 (₹ 2,167.9 crore). The company is undertaking various liquidity initiatives, which includes, among others, a stake sale in Jet Privilege Private Ltd, and the timely implementation of these initiatives is a key rating sensitivity,” ICRA said in a report.

The downgrade came despite hopes of revival at the airline after the private carrier announced a slew of cost-cutting measures and plan to sell stake in its frequent flyer programme. Despite its worst-ever performance in the first quarter, Jet Airways stock saw a revival as investors seemed convinced with the company’s plan of action. A fresh downgrade can reverse all that gain Jet managed to gather.

The ratings downgrade considers the continued deterioration in the operating and financial performance of the company because of its inability to pass on the increase in jet fuel prices to the customers, ICRA said.

ICRA has downgraded the long-term rating assigned to the ₹698.9-crore non-convertible debenture programme, the ₹4,970-crore long-term loans, the ₹645-crore long-term, fund-based facilities and the ₹700-crore long-term, non-fund based facilities of Jet Airways (India) Ltd (‘Jet Airways’ or ‘the company’) to [ICRA]BB from [ICRA]BB+ . ICRA has also downgraded the short-term rating assigned to the ₹3,950-crore short-term, non-fund based facilities of Jet Airways to [ICRA]A4 from [ICRA]A4+.

ICRA said the Naresh Goyal-run airline’s long term outlook rating is Negative.

This is the third time in the last one year that ICRA has downgraded these short-term and long-term loan facilities of Jet Airways. The airline received its last downgrade in May.

“The company is undertaking various liquidity initiatives, and the timely implementation of these initiatives is a key rating sensitivity,” ICRA said.

ICRA said it believes that the credit profile of Jet Airways will continue to remain stretched in the medium term until the domestic airlines industry is able to pass on the increase in jet fuel prices to the customers through an increase in fares or the company is able to raise adequate funds to ease the liquidity pressures.

Jet Airways posted its second consecutive loss of over ₹1,000 crore in the first quarter ended June 30 with a consolidated net loss of ₹1,326 crore on an operating income of ₹,257 crore.

Jet Airways also continues to have a negative net worth for more than two consecutive quarters.

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