Jet Airways (India) and SpiceJet have opened higher by 2% each after the government allowed domestic carriers to import jet fuel or aviation turbine fuel (ATF) directly, instead of uplifting it from state-owned oil marketing firms, by applying to the Directorate General of Foreign Trade (DGFT).
The move, airlines had contended, will save them the sales tax — ranging from 4 to 33% — levied by state governments on fuel.
The decision of allowing import of aviation turbine fuel directly will get some breather to airlines companies from the high sales tax regime imposed by state governments. Jet fuel constitutes about 40% of an airlines' operating cost and the direct import of product will ease the burden on cash-strapped airlines.
Meanwhile, media report suggests that the Civil Aviation Ministry has recommended 49% foreign direct investment (FDI) in aviation sector.
Jet Airways is trading higher by 5% at Rs 335 and SpiceJet by 2.8% at Rs 25.30 on the Bombay Stock Exchange.
