Jet Air Leads Indian Airline Losses as Modi Slaps Duty on Fuel

(Bloomberg) -- India’s struggling airlines are finding out there’s no end to their woes.

Jet fuel, for which they already pay the world’s highest prices, just got dearer as Prime Minister Narendra Modi slapped a duty on imports as part of measures to arrest a slide in the rupee.

Shares of Jet Airways India Ltd., SpiceJet Ltd. and InterGlobe Aviation Ltd. slumped on Thursday in Mumbai after the finance ministry announced a 5 percent import tax on aviation turbine fuel. The government raised customs duties on imports d at $12 billion to help narrow the current-account deficit and bolster the local currency that is trading near a record low.

Read more: Rupee Rout Prompts India to Raise Taxes on $12 Billion of Goods

Jet Airways shares fell almost 10 percent and were headed for their lowest level in more than six years. SpiceJet and InterGlobe, which operates IndiGo, dropped about 4 percent and were set for their worst close since February 2017, according to data compiled by Bloomberg.

Read more: Two-Cent Fares Are Killing Airlines in India’s Cutthroat Market

The move by the Modi administration compounds the troubles faced by Jet Airways, which is seeking to raise funds and reduce debt as part of a turnaround plan.

The Mumbai-based carrier is among those finding it tough to make money in the Indian market, where competition has driven fares below cost. After reporting its biggest quarterly loss since 2015 in August, the Mumbai-based carrier has deferred salaries to some employees and is paying them in installments.

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