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Airline stocks face the heat

August 3, 2009

Airline stocks failed to bring cheer to the market on Monday after the Federation of Indian Airlines (FIA) called off plans for a one-day strike later this month.SPICEJET/INVESTMENT

Private airline operators had on Friday announced they would suspend operations on August 18 to protest the lack of government relief for the ailing industry.

India’s airlines suffered a cumulative $2 billion of losses in 2008/09 on high operating costs and a fall in demand amid a global slowdown.

Shares in Kingfisher dropped 2.3 percent, Spicejet ended down 1.3 percent while Jet Airways fell 2.37 percent.

Quarterly results have been a mixed bag for aviation firms with Kingfisher and Jet Airways posting Q1 losses.

Spicejet announced a net profit of 263.4 million rupees in the first quarter. Its shares rose 5.8 percent on results day.

The Indian civil aviation sector is showing an extraordinary growth rate in the last few years and is expected to grow by 25 percent year-on-year, as per the FIA website.

Do you think it is the right time to invest in aviation stocks?


It’s not the right time to fly, let alone invest in airline stocks. Have you seen the quality of food they serve these days, if they do serve it at all.

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