Jet Airways In air pocket

Mumbai: The Jet Airways stock hit a new low of Rs 511 in today’s trading on the NSE, before it closed at Rs 562.85. Even that is nearly half its IPO price of Rs 1,100. Much of the fall in the price has to do with rising ATF (aviation turbine fuel) prices.
The company’s average per litre fuel cost for the June quarter is estimated to have risen 12 per cent sequentially and 25 per cent y-o-y.
So, fuel cost will now account for nearly 42 per cent of total costs, up from 38 per cent in Q4 FY06. While part of the higher cost has been passed on to passengers, it will not compensate for the rise in fuel prices.
Besides, yields are also under pressure. Jet’s market share has fallen to 36 per cent from 41 per cent in mid-2005. With a significant percentage of passengers travelling on discounted fares, yields could fall by about 5 per cent sequentially for the June quarter, and could well fall marginally in FY07, too.
10/07/06 Niraj Bhatt/Business Standard

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