Airline stocks take off on cut in jet fuel prices
On November 1, ATF rates were cut by a steep 7.3 per cent
Mumbai: Shares of airline companies surged as much as 10 per cent after Jet fuel (ATF) rates were cut by a steep 7.3 per cent.
On November 1, ATF rates were cut by a steep 7.3 per cent, the fourth straight reduction in prices since August on back of falling international oil rates. Reacting to the development, shares of airline companies today opened on a bullish note and then extended their gains as the day progressed. Spicejet opened on a strong note at Rs 14.65, and then gained further momentum and touched a high of Rs 15.42, registering a rise of 10.69 per cent over its previous closing price. Similar movement was seen on the Jet Airways counter as well, where the stock opened at Rs 240, then surged 6.35 per cent to a day's high of 247.
At the end of the trading session the stock was quoted at Rs 240.45, down 3.53 per cent on the BSE. The price of aviation turbine fuel, or jet fuel, in Delhi was cut by Rs 4,987.7 per kilolitre, or 7.3 per cent, to Rs 62,537.93 per kl. This is the fourth reduction in jet fuel rates since August. Rates were cut by almost 3 per cent or Rs 2,077.62 per kl on October 1. Declining international oil prices have made imports cheaper, resulting in price reduction. In Mumbai, jet fuel will cost Rs 64,414.98 per kl as against Rs 69,610.50 per kl previously. The rates vary because of differences in local sales tax or VAT.