Aviation shares rally on cut in ATF prices

Shares of aviation companiesJet Airways, SpiceJet and Kingfisher Airlines are trading higher by 2-9% after the state-owned oil companies cut jet fuel price by 2%, which constitutes over 40% of an airline's operating cost. The reduction in prices will ease the burden of the cash-strapped airlines.

“The price of aviation turbine fuel (ATF), or jet fuel, in Delhi was reduced by Rs 1,376.81 per kl, or 2%, to Rs 65,670.14 per kl with effect from Thursday midnight, the fourth straight reduction in rates since April,” the PTI report suggests.

The aggregate net loss of these three airlines companies have surged over four--fold to Rs 4,354 crore for the last financial year 2011-12, against Rs 1,012 crore in previous fiscal.

 

Among the individual stocks, Kingfisher Airlines has rallied 9% to Rs 11.40, bouncing back more than 13% from all-time low of Rs 10.05 touched in intra-day trades. SpiceJet has surged 4.3% at Rs 29.35, followed by Jet Airways 2.8% at Rs 324 on the Bombay Stock Exchange.