The Corporate Affairs Ministry has sought clarifications from the auditors of Jet Airways.
New Delhi: Cash-strapped Jet Airways will discuss ways to cut costs and turn its business around when its board of directors meets on August 27, the airline said on Wednesday. Jet had told staff this month it was running out of money, a source had told, but the airline had denied this and said it was confident of cutting costs and keeping planes flying.
Airline profits in the world’s fastest-growing aviation market are taking a hit due to rising fuel prices, a weaker rupee and a fare war.
On August 9, the airline's board of directors deferred announcement of unaudited financial results for the June quarter and the same would be taken up on August 27. While considering the unaudited financial results for the June quarter, the board would also "take up the matters in relation to the cost reduction initiatives and turnaround plan, for which the management had earlier sought time", the filing said.
The delay in announcement of financial results by the airline has already come under the regulatory scanner. The Corporate Affairs Ministry has sought clarifications from the auditors of Jet Airways and markets regulator is also looking into the deferment of the results, sources had said.
On August 9, Jet Airways CEO Vinay Dube said that the carrier has been working very diligently and has been implementing for some time a mission plan that looks at every element of structuring from cost perspective, and revenue perspective among others. “We are looking at costs related to fuel, fleet, sales and distribution. And the return to profitability will come with the execution of these measures,” he had told shareholders at the annual general meeting.
On the issue of pay cuts, Dube had said that the airline was looking at multiple elements of restructuring and payroll was one of them.
“We are in deep dialogue with our staff and they are extremely supportive of our restructuring plans... In that we will make the best decision in the interest of the company and the employees,” he had said.
On that day, Jet Airways founder chairman Naresh Goyal said that he felt "guilty and embarrassed" as a lot of shareholders have lost their money, amid the airline's shares plummeting on financial woes.
About reports that the Corporate Affairs Ministry has opened a preliminary probe into alleged diversion of funds at Jet Airways, the airline said on Tuesday that it has not received any communication from the ministry in this regard.
Separately, Jet has said it has not received any communication from corporate affairs ministry after media reports said the airline was being probed for allegations that it siphoned off funds.