Chairman Naresh Goyal
has apologised to shareholders for the losses they suffered because of the sharp erosion in the airline’s share price.
Shares of India's second-largest domestic airline hit a 52-week low of Rs 286.95 in intra-day trade on Thursday — it closed at Rs 301.7. On a year-to-date basis, the stock has tanked 63.7 per cent, highest fall among aviation stocks. IndiGo and SpiceJet stocks, meanwhile, were down 11.7 and 38.6 per cent, respectively, during the same period.
“A lot of shareholders have lost money. I felt guilty and embarrassed,” Goyal told shareholders after listing out measures for growth and corporate governance at the annual general meeting here on Thursday.
Jet launched an IPO in 2005 with an offer price of Rs 1,100 and the stock has been trading below the listing price for the past 12 years.
Goyal — facing tough questions from employees for enforcing salary cuts — broke away from his prepared speech at the AGM to list steps to improve the situation at hand. He said a new committee would be set up to improve public perception and negative publicity. He said the board was being strengthened to correct a perception that the airline is a family-run enterprise. He also said former bureaucrat and board member Nasim Zaidi would chair the company's executive committee.
Shareholders, though, were not impressed. Some questioned the airline’s plans to return to profit. Some asked how the staff will have morale if the bosses say funds will run out in 60 days. The airline has denied its top executive made such a statement.
Responding to shareholders’ questions on pay cuts, Chief Executive Officer Vinay Dube said the management was looking at various options and restructuring pay was one of them. “We are in dialogue with employees and they are supportive of our plans,” Dube said.
Goyal said all board members had decided to take a cut in sitting fees and remuneration, while he has decided not to take any sitting fee.
The chairman said the Rs 6.36-billion loss in the last financial year was because of an increase in cost beyond the control of the company and it was made worse by the massive capacity addition by rivals and irrational pricing in the market.
The airline, he said, would continue to strengthen its relations with Etihad Airways, which owns 24 per cent stake in Jet, to connect new destinations in the West Asia and Africa regions. The partnerships with Air France-KLM and Delta that allowed Jet to provide greater connectivity to Europe and the US would also be strengthened. It is also looking at cooperation from Air India in areas of engineering and flight operations.
Goyal said the airline would focus on marketing at home and abroad after complaints of bad service and poor punctuality soiled its image. “There has been a lot of negative publicity and we are trying to fix it,” he said.