NEW DELHI/BENGALURU (Reuters) - India’s Jet Airways Ltd said auditors have not signed off its first-quarter earnings report, forcing the airline to postpone its results announcement just days after it denied reports that it had told staff it was running out of money.
Jet Airways, late on Thursday, said the audit committee did not recommend the results to the company’s board for approval “pending closure of certain matters”.
Shares in the company, valued at about $500 million, fell as much as 14.5 percent in early trade on Friday hitting a three-year low.
India is the world’s fastest-growing aviation market, but surging fuel prices, a weaker local currency and increasingly competitive air fares are depressing airline profitability.
While profit at global airlines has been strong since 2015 - albeit with wide regional variation - Indian carriers have struggled to stay profitable despite filling nearly 90 percent of seats and seeing a more-than doubling of domestic passenger numbers over the last four years.
InterGlobe Aviation Ltd’s IndiGo, the country’s biggest airline by market share, last month reported its lowest quarterly profit in three years.
Jet Airways, part-owned by Etihad Airways, has been facing financial trouble and earlier this month asked pilots to take a 15 percent pay cut for two years, a proposal they refused, a senior company executive previously told Reuters.
Chief Executive Vinay Dube at the time said the airline was in talks with employees and suppliers to cut costs, and was reviewing sales and distribution, payroll, maintenance and fleet simplification to create “a healthier and more resilient business”.
“They are in some financial distress, they need some equity funding, which is not easy because you need to justify if you are a going concern or not,” said a Mumbai-based analyst, who was not authorized to speak with media and so declined to be identified.
“I don’t think it’s an impossible task given the growth and potential of the Indian market ... although Jet needs to make some structural changes,” the analyst said.
Shares of Jet Airways have fallen 64 percent so far this year and were trading 7.7 percent lower at 0632 GMT. The broader Mumbai market was down 0.36 percent.
Reporting by Aditi Shah and Abinaya Vijayaraghavan; Editing by Sunil Nair and Christopher Cushing