Down, down, down…

That is the way airline stocks have been going over the last few months. Most of these aviation stocks have been in the spotlight after global brokerage firm HSBC initiated coverage on major stocks.

Jet Airways reported a massive loss of ₹1,323 crore for the April-June quarter, but also announced a turnaround plan that includes capital infusion and a stake sale in its loyalty programme to shore up its ailing finances. The valuation of the airline’s frequent flier programme is based on a report by global management consultant On Point. Jet Privilege was ranked at 31, ahead of Etihad’s at 38th with a valuation of $765 million. Etihad bought a 50.1 per cent in the privilege programme in 2014, valuing it at $300 million. Memberships have trebled to 2.8 million since then to 8.5 million. This was the second consecutive quarterly loss for the airline which had posted a profit of ₹53.50 crore in the same quarter last year. “The company has incurred a loss during the current quarter and has a negative net worth as of June 30,” Jet Airways said in a regulatory filing. A negative net worth means that the total liabilities of the airline exceed the total value of its assets.

With jet fuel or aviation turbine fuel (ATF) prices at four-year-high and rupee making fresh all-time lows frequently, domestic airlines have been terribly stressed financially.

Airline stocks have witnessed volatility and moved towards the negative territory in recent times, even as official data showed that domestic passenger traffic grew 21 per cent in July, year on-year. Aviation stocks are no more hot in the Indian bourses with ‘hold’ and ‘reduce’ being the standard advice from most sectoral analysts.