SpiceJet, Kingfisher's pain is Jet Airways' gain, stock up 87% in 3 mths

The Jet Airways stock it seems has gained the most out of plight of its rivals Kingfisher Airlines and SpiceJet Ltd. The fall in crude oil prices has also helped the stock.

Trading in stock of Kingfisher Airlines has been suspended on the BSE and NSE on December 1. Earlier, the Vijay Mallya-owned airlines had been in news for all wrong reasons. The airlines had outstanding loan of nearly Rs 7,500 crore (now amounting to Rs 4,000 crore) to  a consortium of 17 banks led by State Bank of India. Kingfisher never reported a profit since it was listed on the exchanges.

Another airline hit by the crisis is SpiceJet . The airline has reported 5th straight quarter of net losses for the July-September period, at Rs 310 crore, although it is down from the year-ago period when it had a net loss of Rs 559 crore.

The fact may sound comforting for the low-cost carrier but numerous discount offers and weak financials have taken a toll on its operations. The airline auditors in a report in November have cast doubts over the ability of media baron Kalanithi Maran's budget carrier to run it as a "going concern".

The carrier was recently in news as it cancelled over 1,800 flights across the country for December 2014. Around 125 pilots also left the airline to join its rivals.

The strong financials of Jet Airways also swing the conditions in its favour. The airline reported narrowing of consolidated loss by a whopping 95.7 per cent at Rs 43 crore in the three months to September on the back of spurt in operational efficiency. The airline had reported a net loss of Rs 999 crore in the same quarter a year ago.

Offlate, the Jet Airways' stock has risen due to a fall in global crude oil prices. Analysts say that every US $1/bbl fall in crude prices can boost Jet Airways' operating profit estimate for the 2015-16 financial year by 4-5 per cent.

Weakness at rivals will also boost sales of Jet Airways, say traders, as SpiceJet has cut its fleet size to save costs.

During the last three months, the stock has risen 87 per cent till date. On September 11, the stock traded at Rs 233 level on the BSE.

The stock on Wednesday closed 3.51 per cent higher on fall in crude oil prices. Analysts say every $1/bbl fall in crude can boost the carrier's FY16 operating profit estimate by 4-5 per cent. Brent crude prices dipped 1.3 per cent to US $65.98 a barrel on Wednesday, though they remained above a five-year low of US $65.29 reached on Tuesday.