NEW DELHI, Apr 1: Aviation stocks were in high demand in morning trade on Wednesday, with InterGlobe Aviation climbing over 9 per cent, despite jet fuel price hike.
InterGlobe Aviation, the parent firm of IndiGo, after starting the trade on a positive note further jumped 9.41 per cent to Rs 4,315 on the BSE.
The stock of SpiceJet surged 4.72 per cent to Rs 10.20.
Price of Aviation Turbine Fuel (ATF), or jet fuel, was more than doubled to a record Rs 2.07 lakh per kilolitre on Wednesday, mirroring the surge in global oil prices last month, but for domestic airlines, the increase would only be 8.5 per cent.
Domestic airlines will pay half of what other carriers such as non-scheduled, adhoc and charter would pay. For them the prices have gone up by Rs 110,703.08 per kl, or 114.5 per cent, to Rs 207,341.22 per kl.
Jet fuel prices were deregulated more than two decades back, and since then, the rates are aligned with benchmark international prices, as per a written understanding with the airlines.
But since the Middle East war induced surge in global energy prices warranted a steepest increase ever to be made in the ATF prices, the government and state-owned oil companies decided to adopt a calibrated approach, industry sources said.
While foreign airlines and other carriers would pay market rates, prices for domestic airlines have been moderated, they said.
Fuel makes up for around 40 per cent of an airline’s operating cost.
Meanwhile, the country’s largest airline IndiGo on Tuesday announced the appointment of William Walsh, a pilot and current chief of the global airlines’ grouping IATA, as its next CEO. (PTI)
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