New Delhi : Amid Jet Airways facing turbulent times, Civil Aviation Minister Suresh Prabhu has made it clear that private airlines have to deal with issues facing them on their own and the government’s role can only be at the policy level.
The minister’s comments come at a time when the airline industry is grappling with tough times as high oil prices and stiff competition are crimping the profitability of carriers.
When asked about the current situation at Jet Airways, Prabhu said, “We are not aware about their position.”
The full service carrier, which has been flying for over 25 years, is facing financial woes. Earlier this month, it also deferred the announcement of June quarter results. The airline’s share price has taken a beating in recent weeks.
“We are not aware about their (Jet Airways) position. As far as private airlines are concerned, they will have to deal with whatever issues they are dealing with. At the Ministry of (Civil) Aviation we can only deal at the policy level,” Prabhu said.
Pvt airlines need to deal with issues on their own: Prabhu
Jet Airways is facing financial stress and on August 9 the company held off from announcing the unaudited financial results for the June quarter. The airline’s board is scheduled to meet on August 27 to consider and approve the unaudited financial results for the first quarter ended June 30. The carrier is also under the scanner of markets regulator Sebi for alleged disclosure lapses.
Shares of the airline tumbled nearly 4 per cent on Tuesday after reports that the Ministry of Corporate Affairs Ministry is looking into alleged fund diversions at the carrier.
Jet Airways said it “has not received any communication from the Ministry of Corporate Affairs in this regard”. About the overall situation in the airline industry, the minister said that whenever the fuel prices go up, the airlines get badly affected because it is a variable cost and cannot be absorbed into business model immediately.
clarifications on result deferment
New Delhi: The Ministry of Corporate Affairs is seeking clarifications from the auditors of Jet Airways on the airline deferring announcement of its June quarter results, sources said. The board of crisis-hit Jet Airways, which is working on ways to reduce costs amid financial woes, on August 9 deferred the matter of consideration of the unaudited financial results for the June quarter. Sources said the ministry is seeking clarifications from the auditors of Jet Airways on delay in announcement of results. The auditors are believed to have issues regarding the airline being a going concern, they added. In accounting parlance, the going concern assumption means that the company would remain in business for the foreseeable future without being forced to halt operations and liquidate its assets. Markets regulator Sebi is also looking into the airline delaying the June quarter results.
The airline’s board is scheduled to meet on August 27 to consider and approve the unaudited financial results for the first quarter ended June 30.