SpiceJet up 11% on move to directly import fuel

Shares of SpiceJet today jumped more than 11% in the morning trade after the no-frills airline filed an application with the Director General of Foreign Trade (DGFT) seeking permission to directly import aviation turbine fuel (ATF).

When permitted, the direct imports will considerably bring down the airline's operational cost.

Shares of the company opened at Rs 24.70, then rallied 11.15% to an early high of Rs 26.90 on the BSE. The scrip was trading at Rs 26.20, up 8.26% on the BSE at 1143 hours.

SpiceJet is the first airline to make such a move, after the government in end-February issued the notification allowing private airlines to import jet fuel or ATF directly.

Airlines have been demanding permission to get fuel supplies from overseas so that they do not have to pay sales tax that are as high as 30% in some states.

Jet fuel, which makes up for about 40% of an airline's operating expenses, costs the most in the region.

The airline industry is facing financial crisis. The high operating cost of the sector is largely attributable to the cost of ATF.

SpiceJet operates 270 flights daily to 32 Indian cities and two international destinations.