Shares of aviation companies SpiceJet, Jet Airways and IndiGo-owner Interglobe Aviation were trading with gains on the stock exchanges on Wednesday (March 1) after the negligible hike in jet fuel (ATF) prices by Indian Oil Corporation (IOC). In a related news, the government denied plans to sell stake in state-run carrier Air India.
Read: SpiceJet, Jet Airways, Interglobe shares rock on BSE
At around 12.55 pm, SpiceJet was up 2.39 per cent to Rs 77, Jet Airways was gaining marginally at Rs 448 and Interglobe Aviation was trading three per cent higher at Rs 882 on the BSE.
State-run IOC raised ATF prices by Rs 214, or less than half-a-percent, to Rs 54,293 per kilo litre with effect from the intervening night of February 28 and March 1, 2017, in Delhi. The hike is similar across other metros such as Kolkata, Mumbai and Chennai.
Fuel expenses account for about 35 per cent of the total operating costs for aviation companies in India and influence profit margins significantly.
Meanwhile, Civil Aviation Secretary R N Choubey denied media reports that the government was planning to sell 51 per cent stake in Air India to a strategic partner, according to the CNBC-TV18.
Air India had reported operating profit of Rs 105 crore for FY2016.
In January 2017, Air India had a market share of 14.1 per cent in India's burgeoning domestic passenger market. Low-cost IndiGo is the leader with a market share of about 40 per cent, while other players include budget carrier SpiceJet (market share 12.8 per cent), Jet Airways (market share 15.5 per cent) and Go Air (market share 8.2 per cent).
IOC shares were down 1.66 per cent to Rs 378 apiece, HPCL was trading 1.13 per cent lower at Rs 509. BPCL was in the red at Rs 654.
The BSE Sensex was up 181 points at 28,924 at around 1.11 pm. Top gainers were Dr Reddy's Labs, Sun Pharma, HDFC and Axis Bank.
