Aviation Stocks Soar in Early Trade; Indigo Jumps Over 9 Pc

New Delhi: Aviation stocks were in high demand in morning trade on Wednesday; InterGlobe Aviation rose more than 9 percent despite the increase in jet fuel prices. IndiGo’s parent company InterGlobe Aviation rose 9.41 per cent to Rs 4,315 on the BSE after starting trading on a positive note.

Shares of SpiceJet rose 4.72 per cent to Rs 10.20.

Aviation Turbine Fuel (ATF) or jet fuel price more than doubled on Wednesday to touch a record level of Rs 2.07 lakh per kilolitre; This reflected the increase in global oil prices last month, but for domestic airlines the increase would be only 8.5 percent.

Domestic airlines will pay half the amount that other carriers such as non-scheduled, temporary and charter will pay. Prices for them rose by Rs 110,703.08 per kl or 114.5 percent to Rs 207,341.22 per kl.

Jet fuel prices were deregulated more than two decades ago and rates have since been aligned with reference international prices under written agreement with airlines.

But industry sources said the government and state-owned oil companies decided to take a calibrated approach as the surge in global energy prices caused by the Middle East war necessitated the steepest-ever increase in ATF prices.

While foreign airlines and other carriers will pay market rates, domestic airlines’ prices have been softened, they said.

Fuel accounts for approximately 40 percent of an airline’s operating costs.

Meanwhile, the country’s largest airline IndiGo on Tuesday announced the appointment of William Walsh, a pilot and current chief of global airline group IATA, as its next CEO.