BofA negative on airline stocks

The bank retains its 'underperform' rating on Jet Airways India and Spicejet.

Written by Agencies | Published:February 22, 2012 1:55 pm

Bank of America Merrill Lynch remains negative on aviation sector due to slowing traffic growth,strong capacity addition from low-cost carriers and insufficient growth in yields to recover costs.

The bank retains its ‘underperform’ rating on Jet Airways India and Spicejet and expects them to post losses also in FY13.

Despite Kingfisher’s capacity cut,demand growth has lagged the supply growth,the report said. At 1:15 p.m.,Jet Airways was down 2.8 per cent at 343 rupees,Spicejet was down 4.63 per cent at 25.75 rupees and Kingfisher Airlines shares were up a modest 0.93 per cent at 27 rupees.

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