Jet Air leads airline losses as Modi slaps duty

By BLOOMBERG

NEW DELHI • India’s struggling airlines are finding out there’s no end to their woes.

Jet fuel, for which they already pay the world’s highest prices, just got dearer as Prime Minister Narendra Modi slapped a duty on imports as part of measures to arrest a slide in the rupee.

Shares of Jet Airways India Ltd, SpiceJet Ltd and Inter-Globe Aviation Ltd slumped yesterday in Mumbai after the Finance Ministry announced a 5% import tax on aviation turbine fuel.

The government raised customs duties on imports valued at US$12 billion (RM49.68 billion) to help narrow the current-account deficit and bolster the local currency that is trading near a record low.

Jet Airways shares fell almost 10% and were headed for their lowest level in more than six years. SpiceJet and InterGlobe, which operates IndiGo, dropped about 4% and were set for their worst close since February 2017, according to data compiled by Bloomberg.

The move by the Modi administration compounds the troubles faced by Jet Airways, which is seeking to raise funds and reduce debt as part of a turnaround plan.

The Mumbai-based carrier is among those finding it tough to make money in the Indian market, where competition has driven fares below cost.

After reporting its biggest quarterly loss since 2015 in August, the Mumbai-based carrier has deferred salaries to some employees and is paying them in instalments.