Aviation stocks plunge as rupee tanks to all-time low

MUMBAI: Led by Jet Airways, airline stocks today tumbled on the bourses as a weakening rupee, which touched a fresh all-time low, raised concerns about a rise in the air carriers' operating costs.

Shares of Jet Airways (India) settled 4.37 per cent lower at Rs 227.40 on the BSE, while Spicejet lost 3.96 per cent to close at Rs 18.20.

Kingfisher Airlines, too, shed 1.88 per cent to close the day at Rs 23.45. The fall in this stock also defied the positive news about the airline's accounts being de-frozen by the government after a part-payment of its service tax dues.

Analysts said that airline stocks are getting beaten down due to concerns about high operational cost, following a surge in the fuel prices and the rupee depreciation.

The Indian rupee tanked a record low of Rs 53.75 per US dollar this morning, on increased demand for the American currency from banks and importers and sustained foreign capital outflows amid an economic slowdown.

A weak rupee adversely impacts the aviation sector as a significant share of the industry's expenses are denominated in dollars.

The aviation sector is also grappling with surging price of aviation turbine fuel (ATF). The jet fule prices have been on an uptrend since September, as falling rupee made imports costlier.

In the broader market, the BSE key index Sensex ended 121.37 points lower at 15,881.14.