Aviation, hotel stocks to take a beating

Mumbai: Wednesday's terror attacks could affect the already struggling airlines industry and the travel & tourism sectors for at least next two to three months. Other than the direct impact of lower travel needs due to a slowing economy, there is a high probability of what analysts term `collateral damage', like dip in tourist inflows because of adverse travel advisory by other countries on India.
The silver lining, at least for the airlines industry, is the recent dip in crude oil price, that could lead to lower ATF prices, which, in turn, could allow the operators to cut price of tickets to attract more travellers to fly.
Within 24 hours of Wednesday's attacks on the city, Australia has cautioned its citizens about travelling to India. Market players now feel more countries could follow Australia. "Negative developments like these could lead to collateral damage for the airlines as well as travel & tourism industries,'' said Amitabh Chakraborty, president-equities, Religare Securities. Such warnings, coming just before the busy holiday season, could aggravate the pains for these industries, analysts feel.
These industries could also be affected by the cancellation of international conferences, earlier scheduled in India, Chakraborty said. For example, on Thursday, a leading ratings agency cancelled its scheduled conference in one of the two five start hotels in the city, majorly affected by the attacks.
However, marker players feel the slide in these sectors could be a temporary phenomenon.
27/11/08 Times of India

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Categories: Indian Aviation- In General Nov 2008