Airline stocks soar on GoM nod for direct fuel import

Shares of air carriers, including Jet Airways, Kingfisher Airlines and Spicejet, today rallied in the stock market, as a Group of Ministers (GoM) gave its approval for direct import of jet fuel by airlines.

The aviation stocks saw impressive buying in a volatile market and gained as much as 15%, although the market benchmark Sensex slipped 0.5% to close at 17,622.45.

Shares of Jet Airways settled 14.48% higher at Rs 341.20 on the BSE, while Kingfisher Airlines closed at Rs 29.15, up 13.20% from the previous closing price.

Spicejet shares ended the day with a jump of 10.98% to Rs 27.30.

After a meeting of Finance Minister Pranab Mukherjee-headed GoM, Civil Aviation Minister Ajit Singh said that the airline companies "will be allowed to import fuel directly for their use.

"This also has to go to the Cabinet. GoM has approved this. We will try to see whether some kind of credit arrangement can be made," he added.

Domestic airlines companies currently buy aviation turbine fuel (ATF) from oil marketing companies such as IOC, HPCL and BPCL. However, airlines like Kingfisher have said they want to directly import the fuel to lower the costs.