Indian carrier Jet Airways will make cost cuts totalling $285 million after reporting quarterly losses of $189 million in the three months to June.
Jet Airways reported a $142-million loss in the first quarter of this year and has reported losses in seven of the last 10 years despite the boom in air travel in India where domestic traffic rose 21% in the seven months to July.
The carrier blamed a “challenging business environment” for the rising losses, amid increasing fuel costs and a fall in the value of the Indian rupee.
Jet Airways’ board outlined a “comprehensive cost-reduction programme over the next two years”, including a reduction in employees and cuts in maintenance and sales costs.
However, the airline said its network and traffic numbers “continue to deliver robust growth”.
Jet recently took delivery of its first Boeing 737 MAX and announced it has increased its order for the aircraft from 150 to 225, enabling it “to expand the fleet and network footprint”.
Chief executive Vinay Dube said: “The rise in the price of fuel, a depreciating rupee and a resulting mismatch between high fuel prices and low fares have adversely impacted the Indian aviation industry, including Jet Airways.”
But he added: “We are implementing a host of measures to reduce costs and grow revenue.”
Jet Airways is 24% owned by Etihad Airways, which last year relinquished its stakes in Alitalia and in German carrier Air Berlin, which subsequently failed.
An Etihad Aviation Group spokesman said: “We remain committed to our strategic partnership with the airline as it explores and leverages the opportunities presented by the growing Indian aviation market.”
However, Etihad is reported to be reluctant to provide fresh funding. The UAE carrier paid $380 million for its stake in Jet in 2013.
In June, Jet Airways announced India’s first-ever service between Mumbai and Manchester with a service five days a week due to launch on November 5.