India’s defunct full-service carrier Jet Airways reported a loss in the quarter ending September. According to a regulatory filing on November 9th, the company recorded losses of more than ₹300 crore (more than $40 million). This is a standalone net loss as data for the consolidated financial result is not available currently. So, what’s the reason behind Jet losing money in the 3rd quarter? Let’s find out.
Grounded since April 2019, Jet Airways is now being looked after by a monitoring committee that can exercise the powers of the board of directors. As per reports, the company had a total income of ₹45.01 crore (approx. $6 million) in the latest quarter, based on a regulatory filing on Tuesday.
However, Jet reported a standalone net loss of ₹305.76 crore (approx. $41 million) in the same period. The company’s monitoring committee confirmed the loss but said it cannot declare the overall financial results at the moment, stating,
“… the monitoring committee is not in a position to provide the consolidated financial results as the subsidiaries of the company are separate legal entities, also currently non-operational, and the team is facing huge difficulty in obtaining relevant data from the said subsidiaries.”
So, what exactly is the reason behind Jet losing money?
Sale of the 777
The company accepted that much of the ₹306 crore loss – around ₹245 crore (approx. $33 million) – came from selling the carrier’s 14-year-old Boeing 777-300ER aircraft in Amsterdam. The 777 had been stuck at Schiphol Airport since 2019, held back by the Dutch administrator under the insolvency proceedings initiated in the Netherlands. It was seized just an hour before its scheduled departure for Mumbai.
The aircraft, with former registration number VT-JEW, was sold to IAG Aero Group in September for just $9 million and had its registration changed to N377CL. The transaction was part of Jet’s bankruptcy proceedings, and the purchase was made at a price far less than the plane’s market value. Regarding the transaction, the company added in its filing,
“During the quarter, the said aircraft was sold by the Dutch administrator and after deducting mandatory payments, the net proceeds were repatriated to India (the company has recognised a loss of Rs 24,498 lakh on the transaction).”
One gone, five remain
VT-JEW said goodbye to Amsterdam after two and a half years on October 19th when it flew to Victorville, California. But the carrier still has five more 777-300ERs left in its fleet. In August 2020, the Jet reacquired six of its 777s from lessor Fleet Ireland after paying $13 million. Of the five remaining aircraft, two are parked in New Delhi and three in Mumbai.
Now under the ownership of the Kalrock-Jalan consortium, Jet Airways plans to restart operations with a modest fleet of a few narrowbodies for its domestic and short-haul international destinations. However, the company hasn’t ruled out the 777s entirely. In case there’s demand in the future, Jet could think about pulling the airplanes out from storage for long-haul international routes.