Jet Airways needs to raise funds: Auditors

The airline might find it difficult to meet its obligations if the cash flow is not generated soon

sweta-ranjan

Sweta Ranjan | November 22, 2011



The Jet Airways might find it difficult to meet its obligations if the cash flow is not generated soon. Jet Airways auditors have cautioned the company that it should start raising funds or generating cash flow in order to continue fling smoothly. The auditors have also suggested to provide financial support to its loss-making subsidiary JetLite.

Deloitte Haskins & Sells and Chaturvedi & Shah’s report Jet's accounts have to be prepared on a "going concern basis" in the future. The report was prepared on November 11 and was released to the stock exchange on Monday.

In September, auditors of Kingfisher Airlines had warned the carrier and advised to infuse funds to continue as a "going concern".

Though Jet enjoys nearly a quarter of the market share due to rising fuel prices Jet swung to a net loss in September quarter, compared with a profit a year ago.

Recently Jet had said that the company is mulling over cutting cost in many "non-payroll areas" and to sell and lease back aircraft. The company also spoke about plans to cut interest costs by converting rupee loans into dollar debt.

It is becoming tough for airline sector to raise funds as India's airline sector is struggling due to rising fuel costs and a heavy debt burden.

The Centre for Asia Pacific Aviation (CAPA) has forecast a record $2.5-$3 billion loss for Indian airlines for the year ending March 2012.
 

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