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Jet will use cash from Etihad deal to repay debt

Our Bureau Mumbai | Updated on May 27, 2013 Published on May 27, 2013

Jet Airways, which posted net loss of Rs 495.53 crore for the quarter ended March 31, 2013, said it would continue with its cost-cutting plans and pay off $550 million (about Rs 3,060 crore) of loan next fiscal and bring down its debt to $1.5 million, said K.G. Vishwanath, Vice-President, commercial strategy and investor relations.

“We will have incremental cash of $200 million as a result of the Etihad Airways equity deal. In total, we will be retiring around $500-550 million worth of debt, thereby reducing debt to $1.5 billion by March 2014 as against $2.1 billion as on March 2013,” Vishwanath told analysts at a conference call on Monday.

Jet Airways has decided to sell 24 per cent stake to Etihad Airways for Rs 2,058 crore.

Sudheer Raghavan, chief commercial officer at Jet Airways, said the cash from the stake sale will mostly be used to repay high-cost working capital debt. “Key cost benefits and synergies in fleet acquisitions, maintenance, joint purchasing opportunities for fuel, spare parts and insurance and technology support will come through. Other areas of cooperation include joint training of pilots, cabin crew, and engineers and consolidation of Jet’s loyalty programme,” he said. The alliance with Etihad Airways will bring significant benefits to passengers with expanded code sharing, creating a combined network of 140 destinations, he added. The airline has completed reconfiguration of its Boeing 777 aircraft from 312 seats to 346 seats resulting in higher revenues for departures and improved profitability from routes. The airline is also looking at placing orders for more Boeing 737 aircraft, Vishwanath said.

Jet Airways is in the process of taking deliveries of 46 B737-800s planes from an earlier order with Boeing. It has another order of 10 Boeing B787 Dreamliner planes, due for delivery from 2017.

Jet Airways had a cash pile of Rs 840 crore as of March 31 this year. Total debt stood at Rs 11,200 crore on December 31, 2012, down from Rs 13,100 crore on March 31, 2012.

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Published on May 27, 2013
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