Published on 20/03/2019 5:08:23 PM | Source: HT Media

SpiceJet, IndiGo shares surge at the expense of Jet Airways

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Mumbai: Shares of SpiceJet Ltd on Wednesday surged 20% to hit upper circuit on the BSE while IndiGo operator Interglobe Aviation Ltd gained 10% on hopes that the aviation firms will gain financially amid a Jet Airways crisis that refuses to abate.

SpiceJet shares rose 16.38% to ₹91.65 apiece on the BSE while IndiGo shares gained 7.3% to end the day at ₹1,422.80. India's benchmark Sensex rose 0.06% to 38,386.75 points. Year to date, SpiceJet and IndiGo are up 2.8% and 22%, respectively.

Meanwhile, shares of Jet Airways (India) Ltd fell for a sixth session out of the last seven on continued financial woes. More than half of its aircraft fleet is grounded due to non-payment of dues to lessors and several defaults. As on Wednesday, the airline had only 41 planes in operation, down from its original fleet of 119 aircraft.

Reports of Etihad Airways PJSC planning to exit Jet Airways and its loyalty programme—Jet Privilege—are exacerbating the crisis. The government has asked state-run banks to rescue Jet Airways without pushing it into bankruptcy. On Tuesday, Jet Airways’ pilots threatened strike from 1 April unless salary dues were paid by March-end, PTI reported.

"Though the management is evaluating all possible options to raise funds and expedite its turnaround strategy of reducing costs and enhancing revenue, it is racing against time in the current adverse industry scenario of rising competition amidst cost pressure", said SBICap Securities in a 15 February report.

Jet Airways has gross debt of ₹8,411 crore as of September-end, including aircraft debt of ₹1,851 crore. Its shares fell 4.82% to ₹218.00 apiece on Wednesday.