Jet Airways is in extensive talks with lenders and lessors regarding its debt restructuring. Sources indicate that lenders are caught between a rock and a hard place as a default will mean they lose most of their capital while a restructuring would be contingent on providing additional loans.
At the core of the issue is the fact that Jet Airways loses more money than it earns. This is highlighted by a loss per available seat kilometre. In other words, the cost of flying each seat exceeds the revenue earned from the seat. For the second quarter of fiscal 2018-19, Jet lost Rs 0.59 for every seat flown every kilometre.
The way out of this is to boost revenues and cut costs – so that lenders feel certain that the debt repayments will come through. Read More