Jet Airways takes off
Jet Airways is amongst the top gainers on the BSE currently, up 4% at Rs.240.90, with an over two times jump up in volumes. Its intra day high is at Rs.247. This aviation stock and the other listed stock, SpiceJet, is also up over 4.15% at Rs.14.51.
This sudden spike up in interest in aviation stocks is on account of the cut in the aviation fuel prices. For the 4th consecutive time since August, the price has been reduced due to falling crude oil prices. Aviation Turbine Fuel price of ATF has been cut by Rs.4,987.7 per kilolitre, a cut of 7.3% and in Delhi, ATF will cost Rs.62,537.93 per kl while in Mumbai, it is higher at Rs.64,414.98 per kl due to higher local sales tax or VAT.
The market is cheering this price cut as this means a direct fall in its operating costs – 40% of any aviation company’s operating cost is on account of jet fuel cost. Thus this price cut means a direct benefit to the cash-strapped companies through fall in cost.
One does not know yet if this price cut will be passed on to customers via lower flying cost.
Jet Airways is scheduled to declare its Q2FY15 numbers on 7th Nov.