edealinfo
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Re: Jet Airways: reports cash running out

Sat Feb 09, 2019 7:27 pm

Are there any Indigo "insiders" or employees on this thread? If so, could you through light on how the advance bookings are doing on Indigo's New Delhi to Istanbul flight. Thanks.
 
edealinfo
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Re: Jet Airways: reports cash running out

Sat Feb 09, 2019 7:30 pm

lightsaber wrote:
Banks have approved 4,000 crore debt swap for equity. Now for stockholders to accept reality.

https://www.financialexpress.com/indust ... 1895/lite/

I find it interesting Jet is pre-selling so many tickets to EY. Cest la vie

Lightsaber


The conversion to equity at Rs 1 per share (per the article) doesn't make any sense when the market value per share is currently about Rs 235.
 
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Re: Jet Airways: reports cash running out

Tue Feb 12, 2019 4:45 pm

With the again delayed quarterly report, I have a few questions:
1. How much cash does jet have on hand?
2. What obstacles remain to EY's offer. I haven't seen an acceptance. Mostly posturing that limits the incentive for EY to invest.
3. How much of a drop in ASKs has occurred?
4. What is Jet's net fleet (MAXs minus returns, voluntary or not).

We know debts are unpaid.
Pilots are protesting non-payment.
Aircraft are being grounded.

What next?
Lightsaber
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unrave
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Re: Jet Airways: reports cash running out

Tue Feb 12, 2019 4:54 pm

lightsaber wrote:
With the again delayed quarterly report, I have a few questions:
1. How much cash does jet have on hand?
2. What obstacles remain to EY's offer. I haven't seen an acceptance. Mostly posturing that limits the incentive for EY to invest.
3. How much of a drop in ASKs has occurred?
4. What is Jet's net fleet (MAXs minus returns, voluntary or not).

We know debts are unpaid.
Pilots are protesting non-payment.
Aircraft are being grounded.

What next?
Lightsaber

Where did you get this information that quarterly results have been delayed?

1. Nil. They are surviving on advance purchase fares
2. Board meets on 21FEB to decide on the offer
3. As of now, the drop in capacity hasn't been meaningful
4. We do not know for sure
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binayak
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Re: Jet Airways: reports cash running out

Tue Feb 12, 2019 4:54 pm

lightsaber wrote:
With the again delayed quarterly report, I have a few questions:
1. How much cash does jet have on hand?
2. What obstacles remain to EY's offer. I haven't seen an acceptance. Mostly posturing that limits the incentive for EY to invest.
3. How much of a drop in ASKs has occurred?
4. What is Jet's net fleet (MAXs minus returns, voluntary or not).

We know debts are unpaid.
Pilots are protesting non-payment.
Aircraft are being grounded.

What next?
Lightsaber

Multiple times it has been said that the news is old and this time the quarterly report is on time day after tomorrow . !!!
The best preparation for tomorrow is doing your best today
 
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Re: Jet Airways: reports cash running out

Tue Feb 12, 2019 5:04 pm

binayak wrote:
lightsaber wrote:
With the again delayed quarterly report, I have a few questions:
1. How much cash does jet have on hand?
2. What obstacles remain to EY's offer. I haven't seen an acceptance. Mostly posturing that limits the incentive for EY to invest.
3. How much of a drop in ASKs has occurred?
4. What is Jet's net fleet (MAXs minus returns, voluntary or not).

We know debts are unpaid.
Pilots are protesting non-payment.
Aircraft are being grounded.

What next?
Lightsaber

Multiple times it has been said that the news is old and this time the quarterly report is on time day after tomorrow . !!!

Where did you find that information? A.net discussion? I couldn't find it at Jet's website:

https://www.jetairways.com/en/in/invest ... cials.aspx

I couldn't find a recent press release confirming the release of the past due report.

To be blunt, Jet needs to get ahead of the PR.
But what about my other questions? How many planes are flying? Utilization? When a company is on the ropes, more information is expected.

Lightsaber
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Re: Jet Airways: reports cash running out

Tue Feb 12, 2019 5:16 pm

They closed seven stations yesterday, I think. It should give a breathing room on schedule without much ASKM loss.

My take, the engines for the frames which can be returned are with the unpaid MRO.
Without those engines stuck at MRO, Jet cannot return lease-ends, double whammy, cannot use but continue to accrue lease payments.

First chance they get $150 Million, get engines released, return leases and concentrate on salary backlogs and others.
 
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Re: Jet Airways: reports cash running out

Tue Feb 12, 2019 6:26 pm

lightsaber wrote:
I find it interesting Jet is pre-selling so many tickets to EY. Cest la vie.

Circumvents Indian FX regulations using IATA settlement and remain a preferential creditor?
 
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Re: Jet Airways: reports cash running out

Wed Feb 13, 2019 7:29 am

Lessor MC Aviation claims lease rentals on 5 B737 aircraft have not been paid since October
https://www.cnbctv18.com/aviation/lesso ... 280021.htm
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Re: Jet Airways: reports cash running out

Wed Feb 13, 2019 6:56 pm

unrave wrote:
Lessor MC Aviation claims lease rentals on 5 B737 aircraft have not been paid since October
https://www.cnbctv18.com/aviation/lesso ... 280021.htm

Same leasor might reposses, depends on quarterly results.
https://www.moneycontrol.com/news/busin ... 1.html/amp

My take is that the 2/14 release of results is a big day for Jet. It is put up or shut up time.

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Re: Jet Airways: reports cash running out

Thu Feb 14, 2019 2:33 pm

Partial bailout aporoved. Emergency loan of 600 crore. But what concerns me is that is 3 months of losses when SpiceJet and Indigo made a profit. It is a good start to reform though.

https://www.moneycontrol.com/news/busin ... 1.html/amp

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Re: Jet Airways: reports cash running out

Thu Feb 14, 2019 3:21 pm

The board of Jet Airways has approved the Bank Led Resolution Plan (BLRP) today. Under this, lenders will be issued 114 million additional shares during the EGM scheduled for next week, bringing the shareholding of lenders to 50%, NG to 25.5% and Etihad to 12%. By this time next week NG will cease to be in control of Jet
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Re: Jet Airways: reports cash running out

Thu Feb 14, 2019 3:23 pm

unrave wrote:
The board of Jet Airways has approved the Bank Led Resolution Plan (BLRP) today. Under this, lenders will be issued 114 million additional shares during the EGM scheduled for next week, bringing the shareholding of lenders to 50%, NG to 25.5% and Etihad to 12%. By this time next week NG will cease to be in control of Jet


Im confused so even with EY investing more money, their stake falls to 12%? So is Jet controlled by the banks now? If so can the banks sell Jet to anyone they want?
 
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Re: Jet Airways: reports cash running out

Thu Feb 14, 2019 3:26 pm

CaliguyNYC wrote:
Im confused so even with EY investing more money, their stake falls to 12%? So is Jet controlled by the banks now? If so can the banks sell Jet to anyone they want?

This is only a temporary arrangement. EY bringing funds will take place later post necessary approvals and shareholding will change accordingly. But yeah, Jet will be controlled by lenders and sometime down the line they would try to sell it to a strategic investor.
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Re: Jet Airways: reports cash running out

Thu Feb 14, 2019 5:16 pm

CaliguyNYC wrote:
unrave wrote:
The board of Jet Airways has approved the Bank Led Resolution Plan (BLRP) today. Under this, lenders will be issued 114 million additional shares during the EGM scheduled for next week, bringing the shareholding of lenders to 50%, NG to 25.5% and Etihad to 12%. By this time next week NG will cease to be in control of Jet


Im confused so even with EY investing more money, their stake falls to 12%? So is Jet controlled by the banks now? If so can the banks sell Jet to anyone they want?

Looks like the lenders doubled the notional number of stocks and took all the new shares. So in terms of percentage, all of existing shareholders now hold half as before but the same number.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 9:53 am

sabby wrote:
CaliguyNYC wrote:
unrave wrote:
The board of Jet Airways has approved the Bank Led Resolution Plan (BLRP) today. Under this, lenders will be issued 114 million additional shares during the EGM scheduled for next week, bringing the shareholding of lenders to 50%, NG to 25.5% and Etihad to 12%. By this time next week NG will cease to be in control of Jet


Im confused so even with EY investing more money, their stake falls to 12%? So is Jet controlled by the banks now? If so can the banks sell Jet to anyone they want?

Looks like the lenders doubled the notional number of stocks and took all the new shares. So in terms of percentage, all of existing shareholders now hold half as before but the same number.


I actually think this is a better outcome. Assuming Indian banks behave like American banks, I would imagine they will install their person to head Jet (or keep the current guy if they like him). Then there will be a turn around plan. I would imagine cleaning up Jet’s ownership structure will make it more appealing in the future to take over (and the banks will get aggressive to sell in a year or some - I would think).
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 10:33 am

CaliguyNYC wrote:
sabby wrote:
CaliguyNYC wrote:

Im confused so even with EY investing more money, their stake falls to 12%? So is Jet controlled by the banks now? If so can the banks sell Jet to anyone they want?

Looks like the lenders doubled the notional number of stocks and took all the new shares. So in terms of percentage, all of existing shareholders now hold half as before but the same number.


I actually think this is a better outcome. Assuming Indian banks behave like American banks, I would imagine they will install their person to head Jet (or keep the current guy if they like him). Then there will be a turn around plan. I would imagine cleaning up Jet’s ownership structure will make it more appealing in the future to take over (and the banks will get aggressive to sell in a year or some - I would think).


Yes, I agree. Since the lenders have a large skin here, they get to call the shots or at least influence for either a recovery plan to make 9W leaner and profitable or try selling off so they can get some of their money back. As for EY, I think if they infuse more money, it would be at the cost of NG's portion of shares. Personally, I think it is possible to turn around 9W if they hire new top management and/or hire some top consultants to make some restructuring. They have the advantage of being one of only two Indian FSC with significant international operations and the upper middle class sector in India is growing rapidly with surplus of cash. They should refurbish their long haul frames, improve the catering, align some of the timings to sane hours for more yield and maybe rearrange some of the domestic connections accordingly.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:06 am

Jet had their Q3 results conference call today
Image
Basically Jet wants to become an LCC to survive
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BrooklyBOMgal
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:17 am

It comes down to choosing what 9W (and its new management minus Shri Goyal) thinks is good for its bottom line. I don't think they will become a LCC like 6E but they may cut down on certain freebies.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:19 am

unrave wrote:
Basically Jet wants to become an LCC to survive


So having BoB on domestic for non gold/platinums means becoming an LCC? Really?
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:22 am

That bottomline has since long become a bottomless pit for funds
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BrooklyBOMgal
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:22 am

Well....the LCC King 6E is now going thru interesting times.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:26 am

unrave wrote:
That bottomline has since long become a bottomless pit for funds


Maybe the opinion of some but not the one that mattered the most - EY. There must be something there. Yes EY's past investment record isn't great to speak about but at the end of the day 9W got the money it needed. It's EY's money and it's their call and they decided to invest with conditions. At the end of the day the guy who had the money invested in 9W.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:34 am

binayak wrote:
unrave wrote:
Basically Jet wants to become an LCC to survive


So having BoB on domestic for non gold/platinums means becoming an LCC? Really?


Nope. But this does...https://www.youtube.com/watch?v=8HvbBP2Bzws
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:38 am

BrooklyBOMgal wrote:
Well....the LCC King 6E is now going thru interesting times.

What does IndiGo's or any other LCC's troubles have anything to do with Jet's bankruptcy?

binayak wrote:
So having BoB on domestic for non gold/platinums means becoming an LCC? Really?

They don't have much options to cut costs, do they? At a consolidated level they have made a loss of ~Rs 470 crore in a seasonally good quarter. I don't see where their cost cutting is going to happen, unless crude plunges to less than 50
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:42 am

unrave wrote:
BrooklyBOMgal wrote:
Well....the LCC King 6E is now going thru interesting times.

What does IndiGo's or any other LCC's troubles have anything to do with Jet's bankruptcy?

binayak wrote:
So having BoB on domestic for non gold/platinums means becoming an LCC? Really?

They don't have much options to cut costs, do they? At a consolidated level they have made a loss of ~Rs 470 crore in a seasonally good quarter. I don't see where their cost cutting is going to happen, unless crude plunges to less than 50


Well when the LCC King is having troubles (unless the actual reason is known), it isn't a good idea to become a LCC. Just my two cents
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:46 am

BrooklyBOMgal wrote:
Well when the LCC King is having troubles (unless the actual reason is known), it isn't a good idea to become a LCC. Just my two cents

Seeing that Jet has lost upwards of Rs 12,000 crore so far being an FSC hasn't done them any favours either.
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:50 am

Being an FSC alone isn't the reason for the loss. There are many factors.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:50 am

unrave wrote:
BrooklyBOMgal wrote:
Well....the LCC King 6E is now going thru interesting times.

What does IndiGo's or any other LCC's troubles have anything to do with Jet's bankruptcy?

binayak wrote:
So having BoB on domestic for non gold/platinums means becoming an LCC? Really?

They don't have much options to cut costs, do they? At a consolidated level they have made a loss of ~Rs 470 crore in a seasonally good quarter. I don't see where their cost cutting is going to happen, unless crude plunges to less than 50


Yes they do. Network restructuring takes time. Good thing is they could increase RASK and revenues even after reducing capacity. Now they didn't return any aircraft so a/c utilization went low this quarter.
The complete restructuring of network will be done once the excess frames are returned and staff re positioned (more ground staff at hubs etc). All these will happen in the upcoming quarters.
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:51 am

BrooklyBOMgal wrote:
Being an FSC alone isn't the reason for the loss. There are many factors.

Such as?
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BrooklyBOMgal
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:55 am

To name a few, Crude. $. Network planning. Top heavy organization and not to mention capacity dumping on domestic routes by LCC competitors.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:57 am

Changing domestic service to semi-LCC category may not be a bad idea. KLM and SAS have done quite well by going semi-LCC on domestic/intra-EU routes while maintaining Full Service on medium/long hauls.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 11:58 am

binayak wrote:
Yes they do. Network restructuring takes time. Good thing is they could increase RASK and revenues even after reducing capacity. Now they didn't return any aircraft so a/c utilization went low this quarter.
The complete restructuring of network will be done once the excess frames are returned and staff re positioned (more ground staff at hubs etc). All these will happen in the upcoming quarters.

I have just got off the analyst concall with Jet. None of the above was discussed. Where do you get this from? Jet's RASK this quarter was the same as SpiceJet's RASK. That tells you Jet's current model is not working. They will get funds and will survive, but we will be discussing this all over again in 5 years.
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BrooklyBOMgal
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:01 pm

unrave wrote:
binayak wrote:
Yes they do. Network restructuring takes time. Good thing is they could increase RASK and revenues even after reducing capacity. Now they didn't return any aircraft so a/c utilization went low this quarter.
The complete restructuring of network will be done once the excess frames are returned and staff re positioned (more ground staff at hubs etc). All these will happen in the upcoming quarters.

I have just got off the analyst concall with Jet. None of the above was discussed. Where do you get this from? Jet's RASK this quarter was the same as SpiceJet's RASK. That tells you Jet's current model is not working. They will get funds and will survive, but we will be discussing this all over again in 5 years.


There's one factor you haven't considered....the future absence of Shri Goyal and through him Smt Goyal
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:03 pm

sabby wrote:
Changing domestic service to semi-LCC category may not be a bad idea. KLM and SAS have done quite well by going semi-LCC on domestic/intra-EU routes while maintaining Full Service on medium/long hauls.

That is how the US3/EU3 have managed to put up with LCC competition. The service you get on AF in intra Europe routes is no better than an LCC. Jet needs to remove all frills from domestic competition, and bite the bullet and reduce crew costs.
Last edited by unrave on Fri Feb 15, 2019 12:12 pm, edited 1 time in total.
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avier
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:06 pm

The traditional FSC product in domestic is long dead in other matured markets. So this shift to a semi-FSC or semi-LCC or hybrid or whatever model one wants to call, is not the worst idea. That doesn't make 9W a weak carrier in any way.

For any user on here who may have flown FSC's (domestic) in other matured markets would know what I'm saying.

Even the premium airlines of Japan like ANA & JAL offer BoB in economy on domestic sectors in their home markets. Similar for Air New-Zealand, BA, all US domestic FSC's and such carriers.

So let's not assume what 9W is doing is LCC'ish, rather adopting to global market trends.
Food alone doesn't determine an airline to be fully FSC or LCC.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:06 pm

BrooklyBOMgal wrote:

There's one factor you haven't considered....the future absence of Shri Goyal and through him Smt Goyal

That is a very welcome development, but that won't magically transform the airline. It needs to find a way to increase its revenue to meet its costs (become a premium airline) or decrease its costs to meet its revenue (become LCC-like)
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:09 pm

I know its going to cost a lot but I would like to see 9W replace their wide body fleets with newer planes. Most of their wide body fleet is over 10 years old, especially the 777s.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:11 pm

unrave wrote:
binayak wrote:
Yes they do. Network restructuring takes time. Good thing is they could increase RASK and revenues even after reducing capacity. Now they didn't return any aircraft so a/c utilization went low this quarter.
The complete restructuring of network will be done once the excess frames are returned and staff re positioned (more ground staff at hubs etc). All these will happen in the upcoming quarters.

I have just got off the analyst concall with Jet. None of the above was discussed. Where do you get this from? Jet's RASK this quarter was the same as SpiceJet's RASK. That tells you Jet's current model is not working. They will get funds and will survive, but we will be discussing this all over again in 5 years.

They have increased RASK and reduced askms. Their presentation itself says this .
The rest was a reason why their non fuel cask was high this time.
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binayak
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:12 pm

BrooklyBOMgal wrote:
I know its going to cost a lot but I would like to see 9W replace their wide body fleets with newer planes. Most of their wide body fleet is over 10 years old, especially the 777s.

They'll be refurbished later
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:14 pm

binayak wrote:
They have increased RASK and reduced askms. Their presentation itself says this .
The rest was a reason why their non fuel cask was high this time.

CASK went up by 19% and RASK went up by mere 2.6%. In a good quarter. How is this remotely sustainable?
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binayak
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:18 pm

unrave wrote:
binayak wrote:
They have increased RASK and reduced askms. Their presentation itself says this .
The rest was a reason why their non fuel cask was high this time.

CASK went up by 19% and RASK went up by mere 2.6%. In a good quarter. How is this remotely sustainable?

I never meant they're sustainable. All I wanted to say is that non fuel cask will be temporarily high because of reasons I mentioned earlier .
We'll see in the next 1-2 quarters how their network restructuring methods worked. Till now the restructuring is incomplete. So we can judge on the performance of their plans once they get complete.
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:47 pm

BrooklyBOMgal wrote:
I know its going to cost a lot but I would like to see 9W replace their wide body fleets with newer planes. Most of their wide body fleet is over 10 years old, especially the 777s.


Sadly the smartest move for them is to wait for B787MAX which maybe around 2025-27 range, or even A350Neo. Since Oil is low for next few years by the looks of it, using older planes will be more prudent. However, the cabin does need new products, it's quite dated.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:49 pm

9W seems to have cut down other expenses quite a bit. Debt servicing cost is its #1 issue.

Like I said in the past, you can rationalize the network and keep revenue flat, but you need skills which 9W definitely have.
If you are not skilled but have access to cash, just dumping capacity is the only way to increase revenue.

9W should return old leases ASAP, a key to quick revival.

It is amazing 9W employees didn't abandon the ship even with all the bad publicity.
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 12:56 pm

dtw2hyd wrote:
9W seems to have cut down other expenses quite a bit. Debt servicing cost is its #1 issue.


Financial statements of Jet do not support either of these claims
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 3:58 pm

9W latest financials
Image
 
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 4:38 pm

From the sheet above, other expenses
9M 2018 5330 cr
9M 2017 4069 cr
An Indian fifth standard kid knows 5330 > 4069

Finance costs only 4% of total expenses. Opposite of a big issue
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 4:41 pm

unrave wrote:
From the sheet above, other expenses
9M 2018 5330 cr
9M 2017 4069 cr
An Indian fifth standard kid knows 5330 > 4069



He was referring to this quarter only not nine months of the year
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unrave
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 4:48 pm

binayak wrote:
unrave wrote:
From the sheet above, other expenses
9M 2018 5330 cr
9M 2017 4069 cr
An Indian fifth standard kid knows 5330 > 4069



He was referring to this quarter only not nine months of the year

And why did that happen? If you look at the very next page you'll find Note 4 which would tell you that the drop in other expenses this quarter was due to a forex gain. Forex movements are something beyond the control of the airline
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Re: Jet Airways: reports cash running out

Fri Feb 15, 2019 6:38 pm

dtw2hyd wrote:
9W latest financials
Image

Thank you for the numbers.

So aircraft fuel and lease/financing expenses went way up, but other expenses are starting to be brought under control.

I actually consider this a positive considering the loan expenses are about to plummet. With further cost control, I'm getting the first hope if a turn around.

Note:. I assume aircraft expenses have gone up on the MAX (more fuel and maintenance efficient).

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