This is the third rating downgrade in five months as the airline faces a delay in implementing liquidity enhancement measures. A rise in crude oil price, rupee depreciation and inability to pass on costs have been cited as other reasons for the downgrade.
Icra has now assigned a B- (negative) rating for Jet Airways' Rs 70 billion long-term debt (from BB-) which includes non-convertible debentures, loans, fund, and non-fund based facilities.
The rating of Rs 39.50-billion short-term non-fund facilities has been retained at A4.
“The domestic airline industry continues to face headwinds of rising fuel costs and weak pricing power due to excess competition. This is expected to result in a further weakening of the company’s performance in the near term,” Icra said.
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