Airline stocks hit fresh 52-week low as govt imposes custom duty on ATF

Jet Airways down 6% at Rs 181, InterGlobe Aviation and SpiceJet were down 4% at Rs 819 and Rs 67, respectively hitting their respective 52-week lows on the BSE in intra-day today.

Shares of airline companies hit a fresh 52-week low on the BSE in early morning trade on Thursday, after the government imposed customs duty on aviation turbine fuel (ATF).

Jet Airways down 6% at Rs 181, InterGlobe Aviation (IndiGo) and SpiceJet were down 4%  at Rs 819 and Rs 67, respectively hitting their respective 52-week lows on the BSE in intra-day today. At 09:30 am; the S&P BSE Sensex was trading 0.19% higher at 36,611 points.

On Wednesday, the government raised import duties on ATF and 18 other items, as it looks to check the widening current account deficit (CAD).

Five per cent duty on aviation turbine fuel will put an additional burden on airlines, the country's largest domestic airline IndiGo said. Among the domestic airlines, IndiGo imports jet fuel, though its total import is estimated to be less than 5 per cent of its total fuel consumption.

In past one month, the market price of airline companies was down in the range of 18% to 34% on the BSE, as compared to a 5.4% decline in the benchmark index.

Jet Airways has slipped 34% in past one month and tanked 71% in the past six months. The rating agency ICRA earlier this month had revised the long-term rating (assigned to long-term loans and non-convertible debentures) to [ICRA] BB from [ICRA] BB+ (negative outlook).

ICRA considered significant increases in jet fuel prices and no corresponding increase in airfares, which impacted the financial performance of the Company, leading to the rating downgrade.

COMPANY	LATEST	ONE-MONTH BEFORE	LOSS(%)
JET AIRWAYS	183.25	281.80	-34.97
INTERGLOBE AVIAT	829.75	1048.45	-20.86
SPICEJET	68.00	82.95	-18.02