The board of Etihad Airways will take a final call on investing in Jet Airways, the airline said at a post-results conference on Monday. The Abu Dhabi-based carrier is in talks with Jet, and is expected to pick a 24 per cent stake for Rs 1,600 crore.
Last week, the Etihad brass had called on the civil aviation minister, Ajit Singh, and his colleagues finance minister, P Chidambaram, and commerce minister, Anand Sharma, to tell them about their talks with Jet and interest in the Indian civil aviation market.
Etihad Chief Executive James Hogan said due diligence findings would be presented to the board next week, which would then take a decision on investing in Jet. Jet cuts down debt, trims wage bill
Jet cuts debt, wage bill
Jet cut its debt and wage bill, helping the airline achieve a Rs 93-crore profit in the third quarter of FY13. Employee count reduced 1,139 in the third quarter year-on-year, the airline told equity analysts on Monday.
The airline posted Rs 93 crore profit for the third quarter FY13 in comparison to Rs 122 crore loss in the same period last year.
The airline's wage bill reduced 12.8 percent to Rs 367 crore in third quarter of FY 2013. Jet's senior vice president (investor relations) K G Vishwanath said that head count reduced because of high level of attrition amongst cabin crew and ground staff and non filling up of vacant posts. Also the airline terminated contracts of foreign pilots and filled up those with local pilots resulting in lower wage bill. Jet's overall expense on a stand alone basis too was lower by 7.5 percent due to reduction in fuel cost and sales and distribution costs.
The airline has earlier denied reports that it was axing employees as a cost saving measure and stated it was focussing on "several non-payroll areas'' to reduce costs.
Vishwanath also stated that the airline reduced its debt including the aircraft acquisition loan and working capital debt from USD 2.6 billion (Rs 13800 crore) last April to USD 2.16 billion (Rs 11,900 crore) by December end.
"All of our efforts on revenues, costs and network side have resulted in turning around the airline operations. This is despite higher fuel prices and rupee depreciation impact that we have had in the last few months. The combined impact of higher yields and lower costs (excluding fuel) have resulted in significantly lowering the breakeven seat factor levels in the business. We continue in our endeavor on cost cutting measures, exploring various avenues of ancillary revenues and process improvements across all segments of the business, which will help us improve the business further,'' Jet chief executive officer Nikos Kardassis said in a statement on Friday.