Three aviation stocks rose 3.86% to 10% at 11:32 IST on BSE as airlines in India recently announced a steep hike in airfares to mitigate the impact of the sharp fall in the rupee and surge in jet fuel prices.
Kingfisher Airlines (up 10% at Rs 4.62), Jet Airways (up 6.79% at Rs 350), and SpiceJet (up 3.86% to Rs 21.50) edged higher.
Meanwhile, the S&P BSE Sensex was up 148.06 points or 0.78% at 19,127.82.
Kingfisher Airlines had outperformed the market over the past one month till 5 September 2013, rising 5.26% compared with the Sensex's 1.06% fall. The stock had, however, underperformed the market in past one quarter, declining 24.19% as against Sensex's 3.01% fall.
Jet Airways (India) had underperformed the market over the past one month till 5 September 2013, declining 1.56% compared with the Sensex's 1.06% fall. The stock had also underperformed the market in past one quarter, sliding 30.24% as against Sensex's 3.01% fall.
SpiceJet had underperformed the market over the past one month till 5 September 2013, declining 19.61% compared with the Sensex's 1.06% fall. The stock had also underperformed the market in past one quarter, sliding 39.91% as against Sensex's 3.01% fall.
State-run Air India on Thursday, 5 September 2013, hiked passenger fares by 23% to 25% on all domestic routes on the back of sharp jump in fuel price. Jet Airways had on Wednesday, 4 September 2013, announced increase in fares by up to 25%. Budget carrier SpiceJet recently increased fares by 25%.
The price of jet fuel or aviation turbine fuel (ATF) was hiked by a steep 6.9%, taking the rate to Rs 75,031 per kilolitre (KL) from 1 September 2013. This hike had come on the back of two rounds of ATF price hikes effected in July and August by oil marketing companies. ATF prices were increased by 5.8% on July 1 and by another 6.3% on August 1.
ATF or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices.
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