Indian airlines to return to profit in FY2014: Merrill

* "This should see these carriers substantially lower their losses in FY13 and return to profit in FY14," Bank of America-Merrill writes in a report dated on Monday.

* The investment bank has also increased its price target on Jet to Rs 480 from Rs 210, while raising SpiceJet's to Rs 42 from Rs 21.

* The unexpected profits posted by Jet and SpiceJet last week have raised hopes for a turnaround in India's ailing airline industry after its carriers lost a combined USD 2 billion last year.

* Jet Airways shares gain 0.8% to Rs 377.30, while SpiceJet gains 2.7% to Rs 32.60.