Critical condition of Airlines
MUMBAI: The auditors of India’s biggest carrier Jet Airways have warned the company needs to raise funds or generate cash flows in the future to meets its obligations, including financial support to its loss-making subsidiary JetLite.
On Monday, the report was released to the stock exchange, Deloitte Haskins & Sells and Chaturvedi & Shah said in a report dated November 11 that raising money is crucial if Jet’s accounts have to be prepared on a “going concern basis” in the future.
In September, auditors of smaller rival Kingfisher Airlines had warned the carrier needed to infuse funds to continue as a “going concern”.
Jet, which enjoys nearly a quarter of the market share , swung to a net loss in September quarter, compared with a profit a year ago, hurt by rising fuel prices and a forex loss in the quarter.
“Jet is better relative to Kingfisher in terms of financial strength. I definitely think they will make a profit over the time and shore up their capital,” said an analyst with a local brokerage who requested anonymity.
On Wednesday, the company’s shares rose as much as 4.5 percent in early deals, despite the auditor’s comments. At 12.31 pm (0701 GMT), they were up 3.95 percent at 248.6 rupee.
