Aviation stocks nosedive

Mumbai: The stock prices of the three-listed airline companies posted its new 52-week lows on Wednesday, despite the markets jumping more than 700 points. SpiceJet touched an intra-day low of Rs 20.5, Deccan Aviation hit a low of Rs 54 and Jet Airways touched an all-time low of Rs 308.
Investor interest is rather subdued towards the aviation stocks, say brokers. Spicejet was up by 45 paisa, Deccan Aviation was up Rs 4.3, while Jet Airways plunged almost nine per cent or Rs 33.9 from its previous close at Rs 347.55 on Wednesday.
Airfares are likely to increase further as the state-run oil firms have decided to increase the Aviation Turbine Fuel (ATF) prices by another Rs 2,500/3,000 a kilolitre from July 1. “A further increase in ATF prices would only hurt the profits of the already dwindling airline industry. Companies have reported losses in the last quarter due to the rise in fuel prices. The only way the companies can combat a rise in fuel prices is to pass it on to the consumers, this has in turn led to a drop in sales of tickets,” said the head of research at a brokerage.
The accumulated losses for the nine-month period ending March 31, 2008, of Deccan Aviation have increased 161 per cent to Rs 643 crore. Jet Airways India on Tuesday announced a net loss after tax of Rs 221.18 crore for the fourth quarter ended March 31, 2008. Spicejet has reported a loss of Rs 133.5 crore for the financial year ending March 2008 up from Rs 72 crore reported in the previous year, mainly on account of the sharp increase in the price of aviation turbine fuel.
02/07/08 Business Line

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Categories: Indian Aviation- In General Jul 2008