Jet Airways and SpiceJet were recently upgraded to 'buy' from 'underperform' by Bank of America-Merrill Lynch (BofA-ML), who stated that improving industry trends like ticket price hikes and reduced capacity would aid profitability. This should further help these carriers cut their losses in financial year 2013 and rake profits in the subsequent financial year, the investment bank said in its report.
The bank has also raised its price target on Jet Airways to Rs 480 from Rs 210,
and that of SpiceJet to Rs 42 from Rs 21. The unexpected profits posted by Jet Airways and SpiceJet during the quarter ended June 30,2012 have raised hopes for a turnaround in India's ailing aviation sector after a combined loss of USD two billion last year. After running into losses for five quarters consecutively, Jet Airways jumped back into the positive zone with a net income of Rs 36.4 crore in the quarter ended June 30, 2012 on the back of higher yields and cost management. SpiceJet also posed a surprise by reporting a profit in the April-June quarter of 2012, its first since December 2010, as a shortage of aircraft caused by Kingfisher Airlines’ withdrawal helped the former increase ticket fares.
Click here to see the original article>and that of SpiceJet to Rs 42 from Rs 21. The unexpected profits posted by Jet Airways and SpiceJet during the quarter ended June 30,2012 have raised hopes for a turnaround in India's ailing aviation sector after a combined loss of USD two billion last year. After running into losses for five quarters consecutively, Jet Airways jumped back into the positive zone with a net income of Rs 36.4 crore in the quarter ended June 30, 2012 on the back of higher yields and cost management. SpiceJet also posed a surprise by reporting a profit in the April-June quarter of 2012, its first since December 2010, as a shortage of aircraft caused by Kingfisher Airlines’ withdrawal helped the former increase ticket fares.