Crude price fall news sets airline stocks on fire

Thanks to news of a fall in crude oil prices, airline stocks are flying high. With oil prices falling to $68 a barrel from $78, airline stocks, including those of Jet Airways and Air Deccan, are flying north.

Domestic airlines have been reeling from the spiralling aviation turbine fuel (ATF) cost following the rise in crude oil prices.

To mitigate the hike in ATF prices, which constitute 35 to 40 per cent of the operating costs of an airline, domestic carriers have increased their surcharge to Rs 750 per ticket.

Private airline Jet Airways today registered 12.49 per cent at Rs 664.70 on the Bombay Stock Exchange (BSE) against the previous day's close of Rs 590.90. The stock reached an intra-day high of Rs 693. Market sources said the upward rise of Jet was primarily due to fall in crude prices and clarity in its UK services.

"Apparently, the British High Commissioner has clarified that there are security concerns regarding Jet Airways following the detention of one of its employees in London in connection with the Trans-Atlantic bomb plot," sources said.

They added this was likely to clear the clout on the international operations of Jet Airways. Jet has launched an international flight linking New Delhi and Singapore on September 6.

The scrip of Deccan Aviation, which operates low-cost and no-frills carrier Air Deccan, has also gained 4.89 per cent at Rs 94.40 on the BSE against the previous day's close of Rs 90, after touching an intra-day high of Rs 95.50.

Meanwhile, another low-fare carrier SpiceJet declined 1.21 per cent on the bourses at Rs 44.85 against previous day close of Rs 45.40, after touching an intra-day high of Rs 46.10.

At present, there are only three airlines listed on the bourses while other domestic carriers include Kingfisher Airlines, Air Sahara, Paramount Airways, GoAir and IndiGo.