Jet fuel hike, can airlines take the hit ?

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About anilmehta

Anil Mehta is a seasoned investor with expertise in Indian Equity markets.Anil published many white papers and columns on various magzines and newspapers.

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IOC hiked jet fuel prices by nine percent to over Rs 39,000 per kilolitre following a spurt in international oil rates.

Almost a 10% hike . Airlines are already struggling with low traffic and high cost of operations.  Jet AIrways managed to post some profit last quarter as it cut costs and downsized operations. But industry is not out of woods yet. Jet's revenue last quarter down by 22% http://www.livemint.com/2009/10/27164741/Jet8217s-operating-profit-m.htm... )

Kingfisher still ows  900 cr to oil companies ( http://www.business-standard.com/india/news/kingfisher-airlines-owes-rs-... ) .

With OIL hitting $80, airlines will need to comeout with better plan as OIL stays above critical mark of $75.

I won't bet on any Airline stock at these levels and look for better options elsewhere.

 

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