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Aviation stocks bucked the bearish trend in the markets, gaining 5-11 per cent on expectations of a hike in fares, lower aviation turbine fuel charges, and deferral of charges and penalties related to cancellation and poor services.
Analysts, however, believe aviation firms will continue to face pressure from the twin impact of rise in crude oil prices, as well as depreciation of the rupee.
While fuel cost is the single largest cost head for airlines, a weaker rupee will translate to higher maintenance outgo, increase in lease costs, as well as interest payment on foreign currency denominated loans. These costs
