Jet Airways is still taking to the skies, but troubling news surfaced today, that the company has yet to pay its workers salaries for August.
The news has come out just as rating agency Icra on Tuesday downgraded long term ratings of the company's borrowing programmes, from BB+ to 'BB with a negative outlook' citing deterioration in the airline's financial performance. Increased fuel prices have hit the airline sector badly, and Jet Airways released numbers that showed aa deteriorating operating and net performance. The company's debt currently stands at over Rs. 8,150 crore, and banks Jet Airways has approached have been hesitant to bail it out, having recently burned their hands on Mallya's airline.
If the news of employees salaries is true, it is indeed concerning for Jet Airways - it is the kind of information that quickly spooks investors who have invested in the stock, since it raises the very significant question about the level of working capital available. Similar panic had gripped investors on Kingfisher's stock, when news came out that salaries were going unpaid for its workers.
To stem the bleeding, the company has announced a six-day global flight ticket sale. Jet Airways has put up 25 lakh seats on discount of up to 30% on the base fare for domestic and international flights, applicable on select booking classes. The global fare sale is available on booking for one-way and return tickets, for either Premiere or Economy travel. Air passengers from India can choose to travel to any of the airline’s 66 domestic and international destinations.