Jet Airways shares plunge 8% as Etihad, Hinduja fail to reach agreement in their airline bid

Shares of Jet Airways fall over 8 percent intra-day after media reports that Hinduja Group and Etihad Airways failed to strike a deal to buy stake in the cash-strapped airlines.

At 09:30 am, the stock was trading at Rs 144.30 per share, down 7.17 percent on the National Stock Exchange. Intra-day, the stock was down 8.4 percent to Rs 142.35 per share.

Jet Airways' future remains uncertain as Hinduja Group and Etihad Airways fail to make headway in their negotiations for joint ownership of the grounded airline, Business Standard reported.

Furthermore, ratings agency ICRA in a research report said that the grounding of Jet Airways has impacted the industry's capacity by around 14 percent, which has resulted in a 4.2 percent fall in domestic air traffic to 10.99 million in April.

The domestic passenger traffic remained on an upswing between July 2013 and March 2019, after witnessing year-on-year de-growth in June 2013, the ratings agency said in its note on May 23.

"The discontinuation of operations by Jet Airways has impacted about 14 percent of the total industry capacity. Overall, the moderation in capacity starting February has resulted in airfares surging by about 30-40 percent in March over September last year," Kinjal Shah, vice-president and co-head for corporate sector ratings at ICRA, told Moneycontrol.