Jet needs to raise cash flows, funds, say auditors

November 22nd, 2011 - 5:57 pm ICT by IANS  

Mumbai, Nov 22 (IANS) Airline major Jet Airways needs to generate cash flows or raise funds to meet its existing obligations, including the support to its low-cost subsidiary JetLite, the company auditors said Tuesday.

The company’s auditor Deloitte Haskins and Sells and Chaturvedi and Shah said this in a review report on the financial performance of the airline in the quarter ended Sep 30, the airline told the Bombay Stock Exchange (BSE).

“The appropriateness of assumption of going concern is dependent upon the company’s ability to raise finances/generate cash flows in future to meet its obligations, including financial support to its subsidiary,” the auditors said in the report dated Nov 11.

The airline had reported a net loss of Rs.713.60 crore in the second quarter of 2011-12 from a net profit of Rs 12.40 crore in the same period of the previous fiscal, stating that the downturn was due to rising jet fuel costs and rupee depreciation.

“Abnormally high fuel costs, a low fares scenario induced by demand-supply imbalance, together with a depreciating rupee versus the dollar, and fare cuts have collectively impacted the second quarter performance of Jet Airways,” Nikos Kardassis, chief executive of Jet Airways, had said in a statement.

For the first half of the fiscal, the company had reported a net loss of Rs.836.76 crore against a net profit of Rs.15.92 crore in the like period of 2010-11.

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