Ailing full service carrier Jet Airways has now suspended complimentary lounge access to some of its JetPrivilege loyalty programme members as the airline battles a turbulent phase of high debt and rise in costs. Effective from December 1, 2018, complimentary lounge access has been suspended for JetPrivilege platinum and gold members travelling in economy class.
Jet Airways, which is promoted by Naresh Goyal, had reported losses for three consecutive quarters and had been looking to raise funds to meet its immediate capital requirements, but a formal deal was yet to be announced.
"In view of this extremely challenging operating environment, we at Jet Airways have had to take some unprecedented steps. One such difficult decision has been the suspension of complimentary lounge access for JetPrivilege platinum and gold members travelling in economy, effective December 1, 2018, on our domestic and international network," the carrier said in an email sent to its frequent flyer members.
Jet Airways added that these changes were temporary and it would continue to offer complimentary lounge access for guests travelling in first class and Première across domestic and international networks. Also, the new rules are applicable only for passengers travelling on flights operated by Jet Airways. The existing policy of offering lounge access to guests travelling in first class and Première on flights operated by code-share or interline partner airlines will continue.
India's aviation sector has been battling high fuel prices, rupee devaluation and low fares over the last few months. In the last three quarters (Q4 FY18, Q1 FY19 and Q2 FY19), Jet Airways reported losses of Rs 1,036 crore, Rs 1,323 crore and Rs 1,297 crore, respectively. Its gross debt at the end of September stood at Rs 8,411 crore. Rivals of Jet Airways—Indigo and SpiceJet—also reported a loss in the second quarter.
Jet Airways had been in fundraising talks with various groups. The Tata Group had last week confirmed that talks were in initial stages. Goyal also likely initiated talks with its existing investor, Etihad Airways, though there was no official comment on the same. At the end of September, Goyal held 51 per cent stake in Jet Airways. Abu Dhabi-based Etihad held a 24 per cent stake.
"We are in active discussions with various investors to secure sustainable financing to navigate through the current headwinds and create long-term growth. There is interest in our strong brand and confidence in our business turnaround efforts," Vinay Dube, the CEO of Jet Airways, said in a message this week.
In its recent conference call with analysts, Jet Airways officials had acknowledged payments had been delayed to a section of its employees and vendors. As a part of its measures to look at the overall cost structure, the airline had put its six Boeing 777 aircraft up for sale, which it will then lease back. It had also reviewed its network and was deploying aircraft on more profitable, productive and economically efficient routes, according to Dube.
Jet Airways had announced 18 additional services on its domestic and international routes beginning December. It would be launching a new direct service from Pune to Singapore and also adding new frequencies on other select destinations such as Bangkok, Kathmandu, Singapore, Doha and Dubai from Mumbai and Delhi.
