Jet Airways India Ltd. was once at the forefront of India’s rapidly growing market for air travel, but a challenge from budget carriers and surging fuel prices are backing the airline into a corner.
Shares of the carrier, part-owned by Etihad Airways PJSC, plunged 8.5 percent Friday in Mumbai after the company postponed announcing its first-quarter earnings. That’s less than a week after denying a report it needs drastic measures to cut costs and bolster its finances. The stock ended at its lowest level since June 2015 as the carrier’s finances deteriorated and the default risk on its debt obligations increased.
Budget airlines such as IndiGo, GoAir and SpiceJet expanded exponentially in the past decade, giving first-time flyers a new opportunity and middle-class families an alternative to full-service carriers that offered lounges and free meals on board. India, the world’s fastest-growing major aviation market, is also one of the toughest in which to survive, with premium carrier Kingfisher Airlines collapsing and legacy Air India needing repeated state bailouts as ultra-low fares fail to cover their costs.
09/08/18 Anurag Kotoky , Denise Wee , and Kyunghee Park/Bloomberg
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Shares of the carrier, part-owned by Etihad Airways PJSC, plunged 8.5 percent Friday in Mumbai after the company postponed announcing its first-quarter earnings. That’s less than a week after denying a report it needs drastic measures to cut costs and bolster its finances. The stock ended at its lowest level since June 2015 as the carrier’s finances deteriorated and the default risk on its debt obligations increased.
Budget airlines such as IndiGo, GoAir and SpiceJet expanded exponentially in the past decade, giving first-time flyers a new opportunity and middle-class families an alternative to full-service carriers that offered lounges and free meals on board. India, the world’s fastest-growing major aviation market, is also one of the toughest in which to survive, with premium carrier Kingfisher Airlines collapsing and legacy Air India needing repeated state bailouts as ultra-low fares fail to cover their costs.
09/08/18 Anurag Kotoky , Denise Wee , and Kyunghee Park/Bloomberg
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