New Delhi, April 1 Aviation stocks were in the spotlight on Wednesday, with InterGlobe Aviation rising by 6%, after only a partial increase in jet fuel prices.
InterGlobe Aviation, the parent company of IndiGo, started the trading day on a positive note, further rising by 9.84% to Rs 4,332 on the BSE. The stock finally closed at Rs 4,180.90, up 6.01%.
The SpiceJet stock closed at Rs 9.93, up 1.95%. During the day, it surged by 4.72% to Rs 10.20.
A rally in the equity market also boosted buying in these stocks. Starting the new fiscal year on a high note, the 30-share BSE Sensex jumped by 1,186.77 points or 1.65% to close at 73,134.32. The 50-share NSE Nifty climbed by 348 points or 1.56% to end at 22,679.40.
Aviation turbine fuel (ATF) prices for domestic airlines were raised by 8.5% on Wednesday, instead of doubling as warranted by a surge in global oil prices driven by the war.
ATF or jet fuel for domestic carriers was increased by Rs 8,289.04 per kilolitre, or 8.56%, to Rs 1,04,927.18 per kl from Rs 96,638.14 per kl last month, according to state-owned oil firms.
Domestic airlines will pay half of what foreign airlines, as well as other carriers such as non-scheduled, ad hoc, and charter, will pay. For them, the prices have gone up by Rs 1,10,703.08 per kl, or 114.5%, to Rs 2,07,341.22 per kl.
Fuel makes up around 40% of an airline's operating cost.
InterGlobe Aviation said on Wednesday that the partial increase in ATF prices will help mitigate the impact of rising fuel costs due to the Middle East conflict on domestic air travel costs.
SpiceJet Chairman and Managing Director Ajay Singh said on Wednesday that the government's decision to allow only a partial increase in jet fuel prices will be a significant relief for the country's aviation industry at a time of unprecedented global uncertainty.
"The government's decision to allow only a partial increase in Aviation Turbine Fuel prices comes as a significant relief for the Indian aviation industry at a time of unprecedented global uncertainty," Singh said in a statement.
He also said that this timely intervention will go a long way in helping airlines navigate one of the most challenging global crises in recent times, marked by severe external disruptions and volatility in fuel markets.
Meanwhile, India's largest airline, IndiGo, announced the appointment of William Walsh, a pilot and current chief of the global airlines' grouping IATA, as its next CEO.