New Delhi, Apr 1 Aviation stocks saw strong demand on Wednesday morning, with InterGlobe Aviation rising by over 9 per cent, despite a hike in jet fuel prices.
InterGlobe Aviation, the parent company of IndiGo, further jumped 9.41 per cent to Rs 4,315 on the BSE.
The stock of SpiceJet surged 4.72 per cent to Rs 10.20.
The price of Aviation Turbine Fuel (ATF), or jet fuel, more than doubled to a record Rs 2.07 lakh per kilolitre on Wednesday, mirroring the surge in global oil prices last month. However, for domestic airlines, the increase would only be 8.5 per cent.
Domestic airlines will pay half of what other carriers, such as non-scheduled, ad-hoc, and charter airlines, would pay. For them, the prices have increased by Rs 110,703.08 per kl, or 114.5 per cent, to Rs 207,341.22 per kl.
Jet fuel prices were deregulated more than two decades ago, and since then, the rates have been aligned with benchmark international prices, as per an agreement with the airlines.
However, since the surge in global energy prices caused by the Middle East conflict warranted the steepest increase in ATF prices ever, the government and state-owned oil companies decided to adopt a calibrated approach, industry sources said.
While foreign airlines and other carriers would pay market rates, the prices for domestic airlines have been moderated, they said.
Fuel makes up around 40 per cent of an airline's operating cost.
Meanwhile, IndiGo, the country's largest airline, announced on Tuesday the appointment of William Walsh, a pilot and the current chief of the global airlines' grouping IATA, as its next CEO.