CaliguyNYC
Posts: 476
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Wed Aug 15, 2018 5:33 pm

abrelosojos wrote:
NG created and destroyed 9W. I heard the new DL CEO at 9W is totally incapable of understanding Indian culture. Apparently, his American style view of going to the Unions and the cash scare is what created this downward news cycle. Is this true?

Saludos,
Alex


Could be, but I would be totally shocked. In the US if an airline used running out of cash, people would stop booking on them. So a DL employee should know better (but not sure). I think it is typical Indian unions + Indian media. Look at AI, every little thing at AI get covered int he press leaked by employees. Not many places other than France & India where you see employees actually try and hurt their employers on an ongoing basis.
 
Airbusvoyager
Posts: 26
Joined: Fri Oct 07, 2016 7:44 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 3:58 am

unrave wrote:
hohd wrote:
6E dumps capacity on almost every route, granted they created many new routes, there has to be a moratorium on domestic flights from BOM, DEL and BLR (and may be even MAA, CCU and HYD) due to congestion unless it is to a destination not served previously. This might help Jet and AI who have hubs in BOM and DEL. When they fly internationally to nearby countries, they fly the same routes - however not a single airline is flying to Malaysia.

The WTO definition of dumping is selling below cost, last time I checked IndiGo's RASK is higher than its CASK, and even if it weren't so it is not illegal in India. And why should the govt interfere and restrict addition of flights from any airport? Let the competitors battle to death.

Jet used to fly MAA-KUL until very recently but couldn't compete with the LCCs of Malaysia. Unlike SIN, the traveller profile to KUL consists almost entirely of migrant labour with little business traffic. Air Asia has a very lean operation with a cost structure that is lower than even IndiGo's, Indian airlines stand no chance against it.


IA used to fly daily on MAA-KUL on an A320 together with 9W on a B737 daily. AI on top of that flew daily on the A310/A300 on the same route and on some days flew DEL to KUL via BKK. MH on the other hand flew daily on the KUL to MAA, almost daily to BOM and DEL. They flew wide bodied aircrafts for these routes. Jet was to start BOM to KUL but cancelled it altogether when they cancelled flights to Malaysia and decided to code share on MH instead.

Once AK came in and the bilaterals were renewed and reviewed, Malaysia had more access to secondary airports in India and that is when the fall of the Indian airlines in Malaysia began. Today, the Malaysian carriers monopolise the Flights between Malaysia and India. No Indian carriers can compete with the frequency of the Malaysian carriers. Indonesian carrier Batik Indonesia also operates into MAA via KUL from KNO and CGK.

Referring to the point of the traffic between the two countries as being almost entirely on labour traffic, that is not true at all. Malaysia is a Commonwealth nation under the British empire and its history goes back to pre British occupation when India and China used Malaysia as a barter trade point in the fifteenth century. The transit point was the city of Malacca located along the Straits of Malacca. There are close to 3 million ethnic Indians in Malaysia today with the majority from either Tamil Nadu and Kerala and the rest from Northern India. Most of the ethnic Indians in Malaysia today are Hindus and they regularly commute between the two countries for either pilgrimages, travel or visiting family. There is even a growing trend of Malaysians travelling to India for short trips to have their wedding shopping done, cheaper and more options available. Labour traffic is not that high as compared to the Middle East and so on. There are also a big number of Indian expatriates who come to Malaysia for high profile jobs in IT. So I will say there is a lot of traffic between the two countries daily, not transit passengers like SIN. In a day, there are approximately six flights on a narrowbody aircraft between KUL and MAA, four between KUL and BOM with a mix of narrow and wide body, up to three between KUL and DEL using a mix of narrow and wide body, five between KUL and TRZ using narrowbody, four between KUL and COK using narrowbody, up to three between KUL and CCU, Three between KUL and BLR using narrowbody, two between KUL and HYD using narrowbody and many more for non-daily flights such as to Bhubaneswar, Trivandrum and Visakhapathinam using narrowbody and Amritsar and Jaipur using widebody. Just my two cents.
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 5:54 am

Interview of SG CFO:
https://www.linkedin.com/pulse/we-dont- ... ublished=t

Airline was operationally profitable in Q1
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 6:35 am

abrelosojos wrote:
NG created and destroyed 9W. I heard the new DL CEO at 9W is totally incapable of understanding Indian culture. Apparently, his American style view of going to the Unions and the cash scare is what created this downward news cycle. Is this true?


The first part of your comment could well be true. Most CEO's at Jet have had a problem "fitting in" and getting things done they way they are used to because of the inherently family run nature of the airline. The original team that NG assembled had stalwarts from Air India/Indian Airlines as well as many Middle Eastern carriers. That team is long gone. Pushed out by the constricted work environment.

Purely anecdotal - but I am given to understand that the problem is more with the talented Mrs.Goyal than with Naresh himself.

I said too much! Au revoir! :)
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 7:24 am

Blackstone is reportedly in talks to acquire a stake in Jet's loyalty program. At the valuation discussed in the article, if Jet were to sell its entire stake (49.9%) it will raise between Rs. 1500 to Rs. 2000 crore, sufficient to tide over this year.
https://www.livemint.com/Companies/kTHw ... lty-a.html
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 9:44 am

Business Standard - Jet Airways denies stake sale.

Jet Airways on Monday brushed off reports of a possible stake sale and also put to rest questions on rising debts that raised concerns on its ability to keep the airline flying.

"There have been no delays in discharging any of our loan obligations to any of the lenders. In fact, our Bankers have issued a certificate to this extent at periodical intervals. The company further clarifies that over the last several years, there have been no instances of default in meeting its debt obligations," a spokesperson issued a statement.


Jet Airways is reportedly suffering heavy losses and has been passing through a tough phase primarily due to increase in crude oil rates as well as depreciating Indian rupees.

However, the spokesperson said that the company has been pro-actively working on multiple revenue enhancement and cost-cutting measures, which have already started delivering results.

Denying reports that the carrier might offload its JetPrivilege stake to weather financial obstacle, the spokesperson further said, "Jet has been evaluating various funding options to meet its liquidity requirements on priority. The recent news on stake sale by Jet as well as any move to monetize its investment in the frequent flier program - Jet Privilege is purely speculative.



PR lobbyists of competitors are trying to push a negative image of the airline on Social Media & on forums like these without any basis whatsoever. The airline management has repeatedly denied these malicious claims.

Talks with Global private equity players are at an advanced stage for equity lien which is expected to raise $300-450 million.
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 10:01 am

Looks like one of the reasons for sharp fall in Jet's share price this year has been the exit of Foreign Financial Institutions, as reported by Mint. They have cut their stake in Jet from 5.23% to 3.81%, a decline of 27.15%
https://www.livemint.com/Companies/kORk ... cials.html
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 10:13 am

In the past year, FII's were extra-cagey about the Indian market in general, being net sellers to the tune of $200 million. Jet was part of this trend.

However, Jet management is in an advanced stage of negotiations with "Foreign Financial Institutions" to raise the money required for their operations and expansion plans.

There is no immediate threat to their operations.
Mr.Kapoor's favorite poodle!
 
User avatar
lightsaber
Moderator
Posts: 15846
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 3:09 pm

How can failing to hold a scheduled conference call be attributed to bad PR? Any company, in particular a company that had a bad previous quarter must provide timely information or the worst is assumed.

In my opinion, last quarter was the worst in Indian aviation. If Boeing had LEAP engines, SpiceJet would already be expanding. If Pratt hadn't messed up, Indigo would have missed that surge of CFM repairs, would have expanded more (less bench staff as per prior discussion in this thread), and GoAir would have expanded more and cut expenses.

So.. the FSCs had an easier quarter than they will going forward.

unrave wrote:
Blackstone is reportedly in talks to acquire a stake in Jet's loyalty program. At the valuation discussed in the article, if Jet were to sell its entire stake (49.9%) it will raise between Rs. 1500 to Rs. 2000 crore, sufficient to tide over this year.
https://www.livemint.com/Companies/kTHw ... lty-a.html

It looks like the program is being valued at 4,000 crore.

https://m.timesofindia.com/business/ind ... 421340.cms

Jet needs 2,000+ crore. Before I read between the lines, I was hoping for a 4,000 crore infusion. :(

Does anyone have a link comparing cost structure of the Indian airlines? Specifically, I'm looking to compare:
1. Overhead (executives)
2. Pilots
3. Other crew
4. Total maintenance burden
5. Aircraft financing costs

Thanks in advance.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Thu Aug 16, 2018 3:25 pm

lightsaber wrote:

Does anyone have a link comparing cost structure of the Indian airlines? Specifically, I'm looking to compare:
1. Overhead (executives)
2. Pilots
3. Other crew
4. Total maintenance burden
5. Aircraft financing costs

Thanks in advance.

Lightsaber

I will do one for work after Jet announces Q1results. Will post a screenshot.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 5:41 am

Jet Airways to announce results on August 27
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 8:39 am

Jet Airways' employee cost is more than 10x that of IndiGo despite flying significantly fewer aircraft

Image
Source: https://www.business-standard.com/artic ... 691_1.html
India: World's fastest growing major economy. World's fastest growing aviation market.
 
binayak
Posts: 671
Joined: Sat Nov 25, 2017 2:00 pm

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 9:24 am

unrave wrote:
Jet Airways' employee cost is more than 10x that of IndiGo despite flying significantly fewer l


Jet's is a more top heavy organization. Plus the airline is known for providing highest packages to their senior executives compared to the other Indian airlines.
Moreover jet operates wide bodies too where the salaries of employees related will be much more (basically done to avoid losing talent to ME3. Remember both 9W and EK operate B777s ) .
The best preparation for tomorrow is doing your best today
 
avier
Posts: 240
Joined: Tue Aug 07, 2018 12:38 pm

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 9:47 am

unrave wrote:
Jet Airways' employee cost is more than 10x that of IndiGo despite flying significantly fewer aircraft



More than 10x times ? Doesn't sound very legit. Or hard to believe if very true.

6E too has a number of expats working in their management positions, mostly from US. I doubt they'd come cheap especially considering they have been wooed to come and work in India. Also they pay their flight crew- atleast the senior ones- decently well.

SG are pretty much a full desi run airline, so would be believable.
 
User avatar
lightsaber
Moderator
Posts: 15846
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 2:46 pm

Board to meet on 8/27 to consider quarterly results
viewtopic.php?f=3&t=1400609&p=20643793#p20643793

This is just a meeting of the BoD.
I'm very confused by all the delays.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
binayak
Posts: 671
Joined: Sat Nov 25, 2017 2:00 pm

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 3:44 pm

avier wrote:
unrave wrote:
Jet Airways' employee cost is more than 10x that of IndiGo despite flying significantly fewer aircraft



More than 10x times ? Doesn't sound very legit. Or hard to believe if very true.

6E too has a number of expats working in their management positions, mostly from US. I doubt they'd come cheap especially considering they have been wooed to come and work in India. Also they pay their flight crew- atleast the senior ones- decently well.


9W has the maximum number of senior executives earning more than one crore inr annually. That's why you I called it "top heavy ".
Honestly speaking you can't compare the pay scale of 6E's flight crew and that of 9W's . The word "senior " itself is relative concept. It's like you're comparing the salaries of 777 pilots with that of a320s.
The best preparation for tomorrow is doing your best today
 
Exeiowa
Posts: 34
Joined: Fri Jul 06, 2018 4:49 pm

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 3:56 pm

As someone who knows nothong about the company, operations or the environment they are operating in. These actions of delaying financial information do not encourage me that all is well. Just on the actions it makes you worry.
 
User avatar
LAXintl
Posts: 23045
Joined: Wed May 24, 2000 12:12 pm

Re: Jet Airways: reports cash running out

Fri Aug 17, 2018 10:02 pm

Jet Airways is seeking US$400 million in new capital

http://orientaviation.com/articles/3769 ... sh-capital

Reported talks with both U.S Blackstone Group and Indigo Partners on potential investment
From the desert to the sea, to all of Southern California
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Sat Aug 18, 2018 10:52 am

Help comes from business partners for Jet:
https://www.business-standard.com/artic ... 300_1.html
(Article behind paywall)

Boeing has refunded part of the prepayment made while ordering MAX aircraft
Lease terms are being renegotiated
AAI to extend credit window from 15 to 30 days
India: World's fastest growing major economy. World's fastest growing aviation market.
 
Exeiowa
Posts: 34
Joined: Fri Jul 06, 2018 4:49 pm

Re: Jet Airways: reports cash running out

Mon Aug 20, 2018 1:55 am

That kind of deal sounds a little like Monarch, and i remember how that turned out. Presumably Boeing has entered in to agreements with other airlines where it worked out otherwise they would have stopped doing it.
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Mon Aug 20, 2018 3:49 pm

The plot thickens: Jet Airways under scrutiny by the government for siphoning of funds
https://www.moneycontrol.com//news/busi ... 61401.html
India: World's fastest growing major economy. World's fastest growing aviation market.
 
Asiaflyer
Posts: 788
Joined: Fri May 11, 2007 11:50 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 9:21 am

Jet Airways published their Q1 report and things does not look bright.
The loss of INR 13,23 bln equals about USD 188 Mio.

From Reuters:
BUZZ-India's Jet Airways dives on Q1 loss - Reuters News

28-Aug-2018 05:55:35 ** Jet Airways (India) Ltd <JET.NS> shares down as much as
3.76 pct at 271.65 rupees
** The airline posted its second consecutive quarterly loss on Monday; Co to inject funds and cut costs in excess of 20 bln rupees in 2 years [nL3N1VI4OF]
** Jet posted Q1 loss of 13.23 bln rupees compared with profit of 535 mln rupees a year ago.
** India's biggest full-service airline said it plans to further reduce non-fuel expenditure by 12-15 pct in the next 8-10 qtrs.
** Stock has fallen 66.07 pct this year as of last close
SQ,MI,MH,CX,KA,CA,CZ,MU,KE,OZ,QF,NZ,FD,JQ,3K,5J,IT,AI,IC,QR,SK,LF,KL,AF,LH,LX,OS,SR,BA,SN,FR,WF,1I,5T,VZ,VX,AC,NW,UA,US,
 
Flyglobal
Posts: 534
Joined: Sat Mar 15, 2008 6:25 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 10:43 am

Boeing Supports JET and is returning Advanced fees.

Flyglobal
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 11:11 am

avier wrote:
unrave wrote:
Jet Airways' employee cost is more than 10x that of IndiGo despite flying significantly fewer aircraft

More than 10x times ? Doesn't sound very legit. Or hard to believe if very true.


Question: Has Jet Airways said this (cost 10x that of Indigo)? Or is that an inference made by a journalist based in Gurgaon, based on unnamed sources in her city? :cheeky:

Don't go purely by reports in the Indian mainstream media.

I very much doubt this figure of 10x. But repeating a false claim 10 times, and repeating it loudly, makes it the truth.
Mr.Kapoor's favorite poodle!
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 11:18 am

Strange quirks I noticed when going through the details of what is made available by the various airlines.

With Jet, the revenue and expenses broadly tally. There is no unexplained cash being shown. With one other airline though, the columns dont quite match up. Wonder what mysterious source they have found for all the cash? As my former boss would say - "Mystery wonly!" :P This mystery cash showing up every year is another reason why I call this "other airline" Kingfisher part deux.

Jet has not added any new aircraft to its fleet - new inductions have replaced older aircraft that have been placed with other carriers. But their departures and deployed inventory have gone up. Shows they are sweating their assets. Would be interesting to see data on utilization of the fleet.

Jet management also is reworking its debt by retiring some higher cost debt with other instruments. Overall they are on the right track.
Mr.Kapoor's favorite poodle!
 
User avatar
lightsaber
Moderator
Posts: 15846
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 11:53 am

BawliBooch wrote:
Jet has not added any new aircraft to its fleet - new inductions have replaced older aircraft that have been placed with other carriers. But their departures and deployed inventory have gone up. Shows they are sweating their assets. Would be interesting to see data on utilization of the fleet.

Jet management also is reworking its debt by retiring some higher cost debt with other instruments. Overall they are on the right track.

As long as Jet can further cut costs, they will be fine. I expected the loss to be much more. They can recover from this.

In a market growing 20% per year, a business must expand. Jet needs to do better than break even or survive. They need a plan to grow with the market too.
The current quarter is a tough quarter, so they must figure out ways to cut spending fast.

The reality is there isn't much of a premium market in India. Too many comfy seats are chasing too few people willing to pay for them. Strategy shift?

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 11:57 am

lightsaber wrote:

Jet management also is reworking its debt by retiring some higher cost debt with other instruments. Overall they are on the right track.
As long as Jet can further cut costs, they will be fine. I expected the loss to be much more. They can recover from this.


BloombergQuint has a (surprisingly) good take on Jet's situtation
https://www.bloombergquint.com/business ... terly-loss

The conclusion is what we have known all along: Jet needs cash, urgently.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
binayak
Posts: 671
Joined: Sat Nov 25, 2017 2:00 pm

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 12:02 pm

lightsaber wrote:
BawliBooch wrote:
Jet has not added any new aircraft to its fleet - new inductions have replaced older aircraft that have been placed with other carriers. But their departures and deployed inventory have gone up. Shows they are sweating their assets. Would be interesting to see data on utilization of the fleet.

Jet management also is reworking its debt by retiring some higher cost debt with other instruments. Overall they are on the right track.

As long as Jet can further cut costs, they will be fine. I expected the loss to be much more. They can recover from this.

In a market growing 20% per year, a business must expand. Jet needs to do better than break even or survive. They need a plan to grow with the market too.
The current quarter is a tough quarter, so they must figure out ways to cut spending fast.

The reality is there isn't much of a premium market in India. Too many comfy seats are chasing too few people willing to pay for them. Strategy shift?

Lightsaber


12 J is enough for domestic flights . Isn't it?
What I wonder is their 737-900ERs have 28 J !! That's more than their a332s. And as far as I've seen it is deployed in routes like BOM- DAC/BKK.
Is BOM-DAC worth having 28 (regional) J? I think that number must be cut to 20.
The best preparation for tomorrow is doing your best today
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 12:05 pm

Their 900s are all on their way out
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 12:10 pm

binayak wrote:
12 J is enough for domestic flights . Isn't it?

More than enough IMO. 12J+160Y is a good ratio for most domestic routes.

binayak wrote:
What I wonder is their 737-900ERs have 28 J !! That's more than their a332s.

Those High-J 739's are regular 737-900's - not the ER version. Jet had 4 of those JGA-JGD and these were almost exclusively rotated on the BOM-DEL route with the odd extension to GOI and BLR on specific flights. The 737-900ER's have 12 J seats and are deployed all over - I even got one to CCU and KTM!

Kingfisher had 4 A321's with 32 J seats - and these were KF FIrst with 56" pitch and near lie-flat. Again these were deployed almost exclusively on BOM-DEL. At one time BOM-DEL on Jet was ALWAYS on a 737-900 (non ER). Today its a mix of -800's and -900 and a single -700.
Mr.Kapoor's favorite poodle!
 
binayak
Posts: 671
Joined: Sat Nov 25, 2017 2:00 pm

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 12:23 pm

unrave wrote:
lightsaber wrote:

Jet management also is reworking its debt by retiring some higher cost debt with other instruments. Overall they are on the right track.
As long as Jet can further cut costs, they will be fine. I expected the loss to be much more. They can recover from this.


BloombergQuint has a (surprisingly) good take on Jet's situtation
https://www.bloombergquint.com/business ... terly-loss

The conclusion is what we have known all along: Jet needs cash, urgently.

Jet's employee costs are higher than AI??? I'm taking just this line with a heap of salt. It's just impossible.
The best preparation for tomorrow is doing your best today
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 12:33 pm

lightsaber wrote:
As long as Jet can further cut costs, they will be fine. I expected the loss to be much more. They can recover from this.

In a market growing 20% per year, a business must expand. Jet needs to do better than break even or survive. They need a plan to grow with the market too.
The current quarter is a tough quarter, so they must figure out ways to cut spending fast.

Jet is furiously working on cutting costs on various fronts by retiring expensive debt with cheaper instruments, sweating assets more for growth and cutting employee costs. Most of the top executive cadre staff have recd letters announcing cut in their packages. Pilots and Cabin Crew also have received similar letters. The Pilots Union representing Jet pilots (the old Air India Santacruz gang) is fighting it out and it remains to be seen who will blink first. But overall, I think the outlook is positive despite rising costs due to the free-falling rupee, fuel costs and so on. They are doing their best. Now the game for ALL airlines is a scramble to find cash to fund their operations. There is only so much money to be found in the tax havens of Macau and the Isle of Mann. It is not an inexhaustible source. This "hot" money can dry up surprisingly quickly, as KF found out in 2010.

Sorry to be a downer - but the 20% YoY growth, backed by Hot money, cannot continue for ever with these kind of yields. I am just being realistic. If you ask me, this is the time "Team Indigo" should be thinking about switching sides. I would recommend Vistara - i have a feeling they are the next big thing.

lightsaber wrote:
The reality is there isn't much of a premium market in India. Too many comfy seats are chasing too few people willing to pay for them. Strategy shift?

Lightsaber

The premium market has undergone a drastic change. I dont work there anymore, but in my time it wasnt hard to get the company to pay for J for a short domestic hop. Post 2010 however, many companies have changed rules. My (former) media house for example bought in a policy of J only for flights 4 hours+. jet's business product has also seen a decline after the heady days of competing with KF First. Their pitch and onboard soft product is much lower standard now than what it was even 6 years back. Cutting costs to stay competitive.

LCC GoAir's Business product is the one I was particularly impressed by. Interesting evolution.
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:07 pm

binayak wrote:
unrave wrote:
lightsaber wrote:

Jet management also is reworking its debt by retiring some higher cost debt with other instruments. Overall they are on the right track.
As long as Jet can further cut costs, they will be fine. I expected the loss to be much more. They can recover from this.


BloombergQuint has a (surprisingly) good take on Jet's situtation
https://www.bloombergquint.com/business ... terly-loss

The conclusion is what we have known all along: Jet needs cash, urgently.

Jet's employee costs are higher than AI??? I'm taking just this line with a heap of salt. It's just impossible.


That is the problem of perception. All those figures are available in the public domain and verifiable by anyone.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
binayak
Posts: 671
Joined: Sat Nov 25, 2017 2:00 pm

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:15 pm

unrave wrote:

That is the problem of perception. All those figures are available in the public domain and verifiable by anyone.

About AI's staff costs no figures are given . Only said that they are less than jet's!!!
Really can an airline with much bigger staff: aircraft ratio have lesser staff costs? Only that one line in that article I find incorrect.
The best preparation for tomorrow is doing your best today
 
hohd
Posts: 658
Joined: Sat May 17, 2008 1:03 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:21 pm

The problem with Indian aviation is that they dont have much of loyalty flyers unlike in US and to some extent in Europe. US airlines are extremely reliant on loyalty programs and give somewhat generous benefits. Most flyers In India dont seem to care whether they fly Indigo or Jet or AI, even though Jet or AI provde benefits and free snacks/drinks. This is a paradox. Even if Jet and AI get most of the corporate and small business travellers, they would doing much better than Indigo or SpiceJet or Go Air or AirAsia. Vistara has some benefits but does not have a good frequent flyer program.

Jet should have no more than 12 to 20 J seats on domestic and nearby country routes with some filled by paid pax and some by upgrades from premium flyers, but Jet is stingy with upgrades and there are not many premium flyers either. AI is slightly better in upgrades, but not that much different either.
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:25 pm

I base my positive outlook for Jet on 3 factors.

1st is the proven ability to cut costs - Jet has shown us in the past that they can cut costs to keep up with the competition. I remember NG telling some media people years back (when Air Deccan was launched), that his goal is to create an FSC with near-LCC cost structure. I think they have managed that, if not fully then to a great extent. Their onboard product is certainly far far better than Indigo at a (marginally) higher cost. Will Indigo be able to survive, let alone grow when their hot money dries up? Maybe they can! We just haven't seen it yet! And their larger size makes them much, much more unwieldy and vulnerable!

Second, is the nature of the customer base. With its superior product, Jet's customer's are more likely to stick to the carrier than Indigo customers who are mostly chasing the lowest price. Indigo has been competing so far, mostly by dumping capacity into the market built on their seemingly limitless supply of cash. As experience has shown us before with Kingfisher, this "hot" money can dry up overnight. How many of Indigo's customer base will stay loyal to the airline if they jack up prices by say 5%? Right now the game boils down to this mad scramble for cash.

Third - My former boss used to tell me to "follow the money" while covering stories like these - because that is what will bring out the real story. That approach served me well when I was in that business. KF was going strong as long as they had the cash supply from the tax havens and rapidly fell apart when that supply dried up. I may be wrong, but I strongly believe we are going to see the same thing in the coming year. From what I can see, Indigo's entire business model was built on hot money which is fast evaporating while Jet had moved away from hot money starting 2008 or so - their sources are more diverse and more solid.

Why do I say that "Team Indigo" on ANET should be switching sides to Vistara? Because, based on indications that we are getting behind the scenes, Hot money is now flowing away from Indigo/Spice and towards Vistara. There was a reason I posted about Ms.Radia a few days back - because Madam is back in business after a hiatus. Mr.Kapoor is a very chalu fellow - he knew what he was doing when he switched to Vistara - following the money! Save this post! And Watch this space! :P
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:35 pm

The amount of factual errors and logical inconsistencies in the comment above :rotfl:
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:41 pm

binayak wrote:
Jet's employee costs are higher than AI??? I'm taking just this line with a heap of salt. It's just impossible.


Note how no sources were provided for the claims made.

Claims like these need a BUCKET of salt! A heap just wont do! :)
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:41 pm

binayak wrote:
unrave wrote:

That is the problem of perception. All those figures are available in the public domain and verifiable by anyone.

About AI's staff costs no figures are given . Only said that they are less than jet's!!!
Really can an airline with much bigger staff: aircraft ratio have lesser staff costs? Only that one line in that article I find incorrect.

How do you compare employee costs? You'll find lazy analysts/journalists comparing no of employees to planes (stupid) or employee costs to no of planes (even more stupid). You should compare Employee cost/ASKM. The latest available data for AI is provided in the Preliminary Information Memorandum published when the AI privatisation process started. Take that data and compare that with Jet's for that period. You'll have your answer.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
User avatar
lightsaber
Moderator
Posts: 15846
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 1:49 pm

BawliBooch wrote:
I base my positive outlook for Jet on 3 factors.

1st is the proven ability to cut costs - Jet has shown us in the past that they can cut costs to keep up with the competition. I remember NG telling some media people years back (when Air Deccan was launched), that his goal is to create an FSC with near-LCC cost structure. I think they have managed that, if not fully then to a great extent. Their onboard product is certainly far far better than Indigo at a (marginally) higher cost. Will Indigo be able to survive, let alone grow when their hot money dries up? Maybe they can! We just haven't seen it yet! And their larger size makes them much, much more unwieldy and vulnerable!

Second, is the nature of the customer base. With its superior product, Jet's customer's are more likely to stick to the carrier than Indigo customers who are mostly chasing the lowest price. Indigo has been competing so far, mostly by dumping capacity into the market built on their seemingly limitless supply of cash. As experience has shown us before with Kingfisher, this "hot" money can dry up overnight. How many of Indigo's customer base will stay loyal to the airline if they jack up prices by say 5%? Right now the game boils down to this mad scramble for cash.

Third - My former boss used to tell me to "follow the money" while covering stories like these - because that is what will bring out the real story. That approach served me well when I was in that business. KF was going strong as long as they had the cash supply from the tax havens and rapidly fell apart when that supply dried up. I may be wrong, but I strongly believe we are going to see the same thing in the coming year. From what I can see, Indigo's entire business model was built on hot money which is fast evaporating while Jet had moved away from hot money starting 2008 or so - their sources are more diverse and more solid.

Why do I say that "Team Indigo" on ANET should be switching sides to Vistara? Because, based on indications that we are getting behind the scenes, Hot money is now flowing away from Indigo/Spice and towards Vistara. There was a reason I posted about Ms.Radia a few days back - because Madam is back in business after a hiatus. Mr.Kapoor is a very chalu fellow - he knew what he was doing when he switched to Vistara - following the money! Save this post! And Watch this space! :P

On the follow the money, where are links to AI?

One reason I believe Jet will recover is that they have good numbers in the public.

So does Indigo and SpiceJet. I haven't been able to find good numbers on GoAir, AirAsia India, or Vistara.

On the 20% growth:. India needs transportation to become an economic powerhouse. You noted in a prior post you do not think the 29% growth will continue. Why do you think India's economic growth will falter? I just think the growth is at a low price point. Airlines that can significantly cut costs shall thrive. For example, Indigo's A321s due in 4Q. Now India also needs a lot of off topic transportation (deep port for 20,000tey+ vessels, rail, roads, and intra-city transit such as overhead rail).

One reason India aviation is so facinating is that it should be the #1 growth market in the world. It is just going to do so with high taxes, a bit chaotic regulatory system, and low fares.

My employer no longer pays for J for US flights (except for Guam). Bummer. We now have a computer system that forces us to take the cheapest flight that meets the timeline with 1 bag fee already automatically calculated in. Now, the system values our time at a high rate (I'm not allowed to day, but call it $200/hour), so it does a void long layovers. I have to assume Indian companies do the same (else buy Carlson Wagonlit services) as Software is portable. You can add a time premium. E.g., one time they added $20,000/hr as only I could get a grounded aircraft flying (w/my team) and that was our penalty rate. I almost was put w/team on a charter... :). Almost...

That is another problem is private aircraft. This site of my employer keeps 5 private aircraft on retainer. If we really need to get a team somewhere, we don't fly commercial. Same with Intel, Nike, and other big companies.
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 2:12 pm

This image extract from the BloombergQuint article tells you the major issue at Jet
Image

Jet's 'LCC level costs' are clearly too high and their 'superior product' is clearly unable to fetch them revenues to meet their costs.
On top of this they are drowning in debt. It was ~ 8200 crore in March, they have made a cash loss of ~1000 cr this qtr so their debt must have increased by a similar amount. At present they don't even make enough money to cover their interest costs, forget about repaying their debt. They need equity by selling stake in the airline or the FF program. And this opinion is shared by all brokerages who cover Jet: from SBICaps to Nomura to HSBC to JPMC, who unlike journalists have nothing do gain from doing a #PRHatchetJob on Jet.

The best non-journalist analysis of Jet available in the public domain is the rationale from ICRA
https://www.icra.in/Rationale/ShowRatio ... /?Id=70663

Instead of relying on 'feelings' or 'insider information' this is (one of the many) objective analysis of Jet on the basis of hard data.
India: World's fastest growing major economy. World's fastest growing aviation market.
 
CaliguyNYC
Posts: 476
Joined: Tue Sep 27, 2016 7:27 pm

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 2:25 pm

hohd wrote:
The problem with Indian aviation is that they dont have much of loyalty flyers unlike in US and to some extent in Europe. US airlines are extremely reliant on loyalty programs and give somewhat generous benefits. Most flyers In India dont seem to care whether they fly Indigo or Jet or AI, even though Jet or AI provde benefits and free snacks/drinks. This is a paradox. Even if Jet and AI get most of the corporate and small business travellers, they would doing much better than Indigo or SpiceJet or Go Air or AirAsia. Vistara has some benefits but does not have a good frequent flyer program.

Jet should have no more than 12 to 20 J seats on domestic and nearby country routes with some filled by paid pax and some by upgrades from premium flyers, but Jet is stingy with upgrades and there are not many premium flyers either. AI is slightly better in upgrades, but not that much different either.


In fairness Indian airlines almost go out of their way to not make people loyal. There is nothing stopping Jet from upgrading their top FF more. If a BOM based executive flies paid J 6 times a year between BOM and & LHR and they redeem one domestic flight and one flight to SIN in J a year for a family of four - who cares.
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 2:29 pm

lightsaber wrote:
On the follow the money, where are links to AI?

I intentionally left AI out of this discussion. because AI is leeching off the taxpayer, remember? :P Their source of cash flow is not the tax haven's (like the 2 LCC's) or the Gulf Sheikh's (like Jet). AI depends on the taxpayer.

lightsaber wrote:
One reason I believe Jet will recover is that they have good numbers in the public.

So does Indigo and SpiceJet. I haven't been able to find good numbers on GoAir, AirAsia India, or Vistara.

Agree on Jet! Disagree on Indigo/Spice. Would like to hear "Team Indigo" open up on the sources of Indigo's limitless supply of cash. Not that i have high hopes of that happening though! :P


lightsaber wrote:
On the 20% growth:. India needs transportation to become an economic powerhouse. You noted in a prior post you do not think the 29% growth will continue. Why do you think India's economic growth will falter? I just think the growth is at a low price point. Airlines that can significantly cut costs shall thrive. For example, Indigo's A321s due in 4Q.

Does India need transportation air/sea/land? Ofcourse. But for that to be sustainable, India urgently needs structural change in the economy which, despite the promises made in 2014, have just not happened! The airline industry in India is in the doldrums today because the structural changes needed for that have just not kept pace with the industry. Until that happens, we are going to continue running in this cycle of airlines chasing hot money to prop up low yielding operations, loosing money and the hot money fleeing to a new "star" every 10 years. Pretty much what has been happening over past 35 years of the market opening up to competition.

Lets see this objectively now. Has the GDP growth rate really been keeping pace? The recent report released by the Govt (and later pulled from the Govt website) shows that GDP growth has actually fallen in the past 4 years - despite the changed calculation method and other tricks. Much of the infrastructure development seen in the heydays of 2004-2010 are what is holding the market up today. How many new airport terminals were commissioned in the past 4 years? What is the status of the economy after the mess created by the Demonetisation and the mishandling on GST? Before trolls call this "off topic", let me say that these comments establish the fact that the economy has taken a HUGE hit. Given this background, The growth seen in the past few years is simply unsustainable because it was not backed up by a resurgent economy but by capacity dumping by airlines funded with hot money. This model is simply not sustainable.

lightsaber wrote:
Now India also needs a lot of off topic transportation (deep port for 20,000tey+ vessels, rail, roads, and intra-city transit such as overhead rail).

Ofcourse. I would argue that India needs the "off-topic" transportation more than it needs aviation. but that is a separate discussion no? Perhaps on Non-Av? :P
Mr.Kapoor's favorite poodle!
 
User avatar
BawliBooch
Posts: 1263
Joined: Mon Nov 28, 2016 4:24 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 2:34 pm

CaliguyNYC wrote:
In fairness Indian airlines almost go out of their way to not make people loyal. There is nothing stopping Jet from upgrading their top FF more. If a BOM based executive flies paid J 6 times a year between BOM and & LHR and they redeem one domestic flight and one flight to SIN in J a year for a family of four - who cares.


Doesn't Jet now have program where the loyalty benefits accrue to the company rather than to individuals? Will this help improve sales in premium cabins/fares since most premium travel in India is corporate funded?
Mr.Kapoor's favorite poodle!
 
User avatar
unrave
Posts: 1363
Joined: Tue Jan 06, 2015 6:37 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 2:59 pm

lightsaber wrote:


On the follow the money, where are links to AI?

One reason I believe Jet will recover is that they have good numbers in the public.

They will survive because they have two more avenues to raise cash: their FF program and selling equity. Investment banks (I forget which one) have received the mandate to find a buyer for the FF program. That cash will sustain Jet for a couple of years. They will thrive if oil price falls.

So does Indigo and SpiceJet. I haven't been able to find good numbers on GoAir, AirAsia India, or Vistara.

GoAir, Air Asia India and Vistara are not public companies so you won't find their numbers. Of these GoAir may have posted a small profit in March but the other two are heavily bleeding. Vistara's doesn't talk about profits before 2020!

I just think the growth is at a low price point. Airlines that can significantly cut costs shall thrive. For example, Indigo's A321s due in 4Q.

Indian aviation growth was languishing in the mid single digits in 2012-13, all that pent up demand has led to double digit growth for 47 continuous months. We are at the tail end of that growth, I suspect growth will come down significantly by the end of this year, unless oil price falls. Only 6e has concrete plans for capacity addition, 9W and SG will in likely use their MAX for replacing NG.

Now India also needs a lot of off topic transportation (deep port for 20,000tey+ vessels, rail, roads, and intra-city transit such as overhead rail).

Do you know that India is currently the world's largest spender on roads, second largest spender on heavy rail and metros, among the top 5 spenders on airport...
India: World's fastest growing major economy. World's fastest growing aviation market.
 
behramjee
Posts: 4703
Joined: Sat Aug 02, 2003 4:56 am

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 4:28 pm

If I had to suggest, the cost cut backs on the network side of things I would implement for 9W are as follows:

1. Suspend YYZ and code share via AMS CDG with KL AF. 9W also currently code share with AC via LHR so they have their bases covered for Canada!

2. Defer MAN and SYD launches till W19

3. Defer all new aircraft deliveries in 2019 till 2021

4. Wet/Dry lease out 2 B77Ws to anyone interested

5. Suspend MAA-CDG
 
User avatar
lightsaber
Moderator
Posts: 15846
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Tue Aug 28, 2018 4:31 pm

behramjee wrote:
If I had to suggest, the cost cut backs on the network side of things I would implement for 9W are as follows:

1. Suspend YYZ and code share via AMS CDG with KL AF

2. Defer MAN and SYD launches till W19

3. Defer all new aircraft deliveries in 2019 till 2021

4. Wet/Dry lease out 2 B77Ws to anyone interested

5. Suspend MAA-CDG

You make good points, but with extreame part and fuel taxes in India, I would replace aircraft early. The taxes force a different approach. In particular with today's new widebodies and new engines on the MAX.

I also wonder if code sharing helps MAA-CDG?
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.
 
Bhadra
Posts: 16
Joined: Tue Aug 28, 2018 11:21 pm

Re: Jet Airways: reports cash running out

Wed Aug 29, 2018 12:01 am

Hey guys, nice meeting you all - it's my very first post in here. I'm a financial analyst/fund manager by occupation and an aviation enthusiast. I've been following several forums in here for a while now and for most part, I'm impressed by the depth of information that you guys have - thanks for sharing, you have my sincere appreciation for that.

I do have a question for you guys though. There are close to a dozen references to the term 'hot money' by user 'BawliBooch' just on this page and most of it is with reference to the source of funding for Interglobe Aviation. Can someone tell me what it is?

Disclosure: As part of my work I've done extensive assessment of the financials of Interglobe Aviation and I'm of the opinion that it is one of well managed (financially and operationally) public companies in the country (not just in civil aviation industry).

Obviously, I'm a little surprised to find that someone has figured out a discrepancy in reported financials of the company that I haven't. Oh, please respond with facts only and spare me your inner voice. Thank you!
 
blrsea
Posts: 1758
Joined: Fri May 20, 2005 2:22 am

Re: Jet Airways: reports cash running out

Wed Aug 29, 2018 1:07 am

Jet has received $300m, and is also considering SLB of its planes to get around $700-800m

Jet Airways gets $300 million as lease incentives & debt from banks

Cash-crunched Jet Airways today said it has received an liquidity support of USD 300 million in the form of advance lease incentives and borrowings from domestic banks.
...
Agarwal, however, did not give the breakup, but said, "A large proportion of it came from lease incentives."

...
He also said that the airline could sell and lease back some of the 16 planes which are owned by the airline to mop up funds.

Of these, 10 are Boeing 777s, three Airbus A330s and rest Boeing 737s, he said, adding, the market value of these planes is pegged at around USD 750-800 million.

"Clearly there is a large equity sitting and Jet Airways can sell and lease back a some of these planes," he added.

 
User avatar
lightsaber
Moderator
Posts: 15846
Joined: Wed Jan 19, 2005 10:55 pm

Re: Jet Airways: reports cash running out

Wed Aug 29, 2018 1:32 am

blrsea wrote:
Jet has received $300m, and is also considering SLB of its planes to get around $700-800m

Jet Airways gets $300 million as lease incentives & debt from banks

Cash-crunched Jet Airways today said it has received an liquidity support of USD 300 million in the form of advance lease incentives and borrowings from domestic banks.
...
Agarwal, however, did not give the breakup, but said, "A large proportion of it came from lease incentives."

...
He also said that the airline could sell and lease back some of the 16 planes which are owned by the airline to mop up funds.

Of these, 10 are Boeing 777s, three Airbus A330s and rest Boeing 737s, he said, adding, the market value of these planes is pegged at around USD 750-800 million.

"Clearly there is a large equity sitting and Jet Airways can sell and lease back a some of these planes," he added.


Now that is a lifeline!

$300million now. Now they will not get $800 million after sale/leaseback. They would be lucky to get $650 million. But by owning aircraft, they have options.

They need to ensure costs are rapidly taken care of; $300 million could be gone in a bad quarter and for Indian airlines, the July-September quarter is looking brutal.

Lightsaber
You only have the first amendment with the 2nd. If you're not going to offend someone with what you say, you don't have the 1st.

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos