Jet shares fall to a four-year low after I-T survey at offices
Shares of Naresh Goyalled Jet Airways fell to ₹229.70 a piece, its lowest in nearly four years, on Friday amid reports that the income-tax department had conducted surveys at its offices in New Delhi and Mumbai.
This adds to the woes of the beleaguered airline, which is struggling with high costs largely as a result of high aviation fuel prices and a weakening rupee.
The airline had also come under the scanner of the civil aviation ministry, which ordered a probe on September 20 after a flight that took off from the Chhatrapati Shivaji International Airport in Mumbai for Jaipur that day had to turn back as several passengers suffered nose and ear bleeding.
Jet Airways shares closed at ₹229.70 a piece on BSE on Friday, their lowest level since October 21, 2014, when the share hit ₹226.25.
Friday’s low came just two days after the income-tax department on September 19 began inspection at some properties of Jet Airways.
“The income-tax department is conducting a verification survey at Jet Airways’ offices under Section 133A of the Income Tax Act,” an income tax official said.
“This is not a raid. We are just verifying if there has been certain falsification of expenses, or any other suspicious transactions,” the official added.
“The company is fully cooperating with the authorities and is responding to the queries raised
MUMBAI:
by income tax authorities,” the airline said in a notice to the exchanges.
Rising jet fuel prices and a weakening rupee have swelled operating costs of Indian airlines as a majority of payments are dollar-denominated.
While the domestic aviation sector faces headwinds, Jet Airways, which is essentially a fullservice carrier, also faces stiff competition from budget airlines, which operate on a comparatively lower cost model.
As part of its efforts to cut costs, Jet Airways plans to bring down its non-fuel costs by 12-15 percent over the next few quarters. The benchmark Brent crude price surged 41.07% in the past 12 months. In the same period, the rupee weakened 10.31% against the dollar.
Jet Airways, which had about 13.6% of the domestic market share in July, on August 27 reported a fiscal first quarter loss of ₹1,323 crore, excluding those of its unit, its second consecutive quarterly loss.