Shares in Jet Airways extended losses on continued concerns about whether the carrier will clinch a stake sale to Abu Dhabi-based carrier Etihad Airways.
Jet Airways shares traded 4 per cent lower at Rs 538.60 on the BSE as of 10.55 a.m., after recovering from the day's low of Rs 529. Jet Airways shares are down nearly 10 per cent this week as of Thursday's close after Etihad Chairman Sheikh Hamed bin Zayed al-Nahayan told Reuters on Sunday it was too soon to say when a final agreement between the two carriers would be struck.
Meanwhile, shares in budget carrier SpiceJet also extended declines falling 2.5 per cent. SpiceJet, India's number 4 operator by market share, has been under pressure after Malaysia's AirAsia Bhd, Asia's largest budget carrier, said it plans to launch a regional airline in the country in a venture with the Tata group.
Global investment bank JP Morgan said AirAsia's planned entry into the Indian aviation space spells trouble for current operators like SpiceJet.
SpiceJet has major presence in Chennai and tier II/III cities. AirAsia India will also be based in Chennai and will be serving smaller cities, adding to pressure in an already competitive market.
The only exception among listed airline stocks was Kingfisher, which rose for the fifth straight day. The stock traded 2.6 per cent higher at Rs 11.90 on the BSE.
Kingfisher Airlines controlling stakeholder United Breweries Holdings has raised the amount it can lend to the ailing carrier. United Breweries said earlier this week that it had raised the limit of loans for Kingfisher to Rs 750 crore from Rs 300 crore.
The statement came after lenders to Kingfisher said on February 12 that they would take initial steps towards recovering $1.4 billion of loans in default after the company failed to come up with a viable funding plan.
UB Group, the parent of both Kingfisher Airlines and United Breweries, has told lenders it would consider using proceeds from a stake sale in a separate group company to Diageo Plc.
Kingfisher has not flown since the start of October after racking up debt estimated as high as $2.5 billion and failing to pay staff, airports, banks and others.(With inputs from Reuters)