Shares of Aviation companies – IndiGo, SpiceJet, Jet Airways, and Global Vectra Helicorp gained up to 6 per cent on the BSE intraday during Monday’s trading session on the back of over 2 per cent reduction in Air Turbine Fuel (ATF) prices.
Individually, SpiceJet shares surge most, by 6 per cent to Rs 40.45 a share, followed by Global Vectra Helicorp up over 3.5 per cent to Rs 46.6 a share, while Jet Airways, which is yet to be operational after the insolvency process, gained nearly 2 per cent to Rs 106 per share on the BSE intraday.
The highest market share in the aviation space – IndiGo grew almost 1.5 per cent to Rs 1808.2 per share on the BSE intraday. JM Financial believes Indigo’s share price at the current price adequately factors for the improving momentum in passenger demand.
ATF prices on Saturday were reduced by 2.2 per cent or Rs 3,084.94 per kilolitre to Rs 138,147.93 per kl, a price notification of state-run fuel retailers showed amid a fall in global oil prices.
Prices of ATF had peaked at Rs 141,232.87 per kl (Rs 141.23 per litre) last month and this is only the second reduction in rates this year, earlier, it was revised on the 1st and 16th of every month based on rates of benchmark international oil rates in the previous fortnight.
International oil prices have softened since on fears of a recession in major economies. Oil prices are at pre-Ukraine war levels.
Similarly, the government to give relief to the aviation sector has come up with the idea of cheap ATF, which shall be available on 17 routes under the Regional Connectivity Scheme (RCS).
According to the Zee Business report, the government reduced excise duty by 2 per cent on ATF for domestic flights and extended the exemption period on some routes till December 8, 2022.