Aviation stocks hit air-pocket

Investors in aviation stocks may have to wait for long to get good returns. With oil prices touching a record high of $119 per barrel, and rising airfares prompting some passengers to put off flying, Indian carriers are expected to incur heavy losses. In India, prices of aviation turbine fuel (ATF) has gone up by an average of 42 per cent from April 2007.
For the year ended March 31 2008, airlines are expected to report a collective loss of Rs 4,000 crore ($1 billion). Analysts feel the financial year 2008-2009 will be no better.
Here is the first sign of an impending slowdown: Deccan Aviation, one of the listed aviation stocks, reported a net loss of Rs 199.6 crore for the third quarter ended March 2008 compared to Rs 213 crore in the corresponding period of the previous year.
Air Deccan reported a net loss of Rs 190. 86 crore in the second quarter ended December 31, 2007 as compared to a net profit of Rs 9.6 crore in the same period previous year.Jet Airways will announce the results later this month followed by Spice Jet, the other listed stock in the Indian bourses.
Though airlines would manage to run the operations even after making losses, fund raising programmes would come under severe pressure said analysts.
29/04/08 Lalatendu Mishra/Hindustan Times

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Categories: Indian Aviation- In General Apr 2008