Aviation shares gain on cut in jet fuel prices

Spicejet surged 6% to Rs 13, while Jet Airways up nearly 5% to Rs 218 on the Bombay Stock Exchange.

Aviation stocks have rallied by up to 6% on the bourse today as state-owned oil companies reduced the price of aviation turbine fuel (ATF) or jet fuel by a steep 3% on the back of falling international oil rates.

Shares of Spicejet has surged 6% to Rs 13.01, while Kingfisher Airlines locked in upper circuit of 5% at Rs 2.15 on the Bombay Stock Exchange (BSE).  Similarly, Jet Airways up nearly 5% to Rs 218.

This is the third reduction in jet fuel rates since July. Declining international oil prices have made imports cheaper, resulting in price reduction, PTI report suggests.

Jet fuel constitutes over 40% of an airline's operating cost and the reduction in prices will ease the burden of the cash-strapped airlines.