Jet Airways (India) Ltd’s stock fell 8.89% on the Bombay Stock Exchange (BSE) on Wednesday, amidst concerns of increasing fuel price burden, no government sops, steep losses in the quarter ended and tumbling passenger count on domestic flights.
Low-fare carrier’s shares listed on the bourses however went up marginally on the same day as BSE went up by 5.4%.
Deccan Aviation Ltd.’s stock was up 7.54% to end at Rs 61.35 on BSE while Gurgaon-based SpiceJet Ltd that runs SpiceJet went up by 2.03% to end at Rs 22.60.
Airlines have been one of the hardest hit sector as nearly half of their operating cost depends on fuel - majority of it is externally sourced- that has been skyrocketing over the past few months.
Jet, that has 109 aircraft-fleet with 526 daily flights, lost over Rs 653.87 crore in the last fiscal with SpiceJet, with an 18-aircraft fleet, loosing Rs 133.50 crore.
“The adverse fuel cost scenario has created a negative sentiment in the market towards the sector. And everyone knows that even the first quarter is going to be bad,” said a Mumbai-based analyst with an international brokerage firm who asked not to be quoted as he is not authorized to speak with the media.
State government’s possible reduction in sales taxes on jet fuel remains under discussions. “There is no relief being seen coming from anywhere,” the analyst added referring to stock “correction”.
Another Mumbai-based analyst with a domestic brokerage firm who too did not wanted to be named said Jet Airways has not announced another hike in fuel surcharges after the oil companies increased prices from July 1st, as expected.
Domestic carriers had met in the capital under the aegis of industry lobbying body Federation of Indian Airlines (FIA) on Tuesday to look at possible hike.
However budget airlines SpiceJet and InterGlobe Aviation Pvt Ltd-run IndiGo sought to keep the fares as it is, according to a senior airline official, resulting in a no immediate announcement. The prices announced in July, budget carriers argued in the same meeting, matched the original June hike which accommodated customs duty cuts, thereby creasing the need for another fare increase. “Each airline has to take its own call,” Jet’s CEO Wolfgang Prock-Schauer said after the meeting but declined details.