Shares of SpiceJet and Jet Airways saw huge buying today, gaining over 16 per cent, after jet fuel became cheaper.
SpiceJet’s stock climbed 16.50 per cent to settle at Rs 21.25 and Jet Airways rallied 8.09 per cent to Rs 348.10 on the BSE.
Jet fuel constitutes over 40 per cent of an airline’s operating costs and the price cut will ease the financial burden of cash-strapped carriers.
The price of aviation turbine fuel (ATF), or jet fuel, at Delhi was cut by Rs 2,594.93 per kilolitre, or 4.1 per cent, to Rs 59,943 per kl. This is the fifth straight monthly reduction in rates.
Since August, ATF prices have been cut by 14.5 per cent or Rs 10,218.76 per kl and rates have dipped below Rs 60,000 per kl level for the first time in three years.
Brent, the benchmark grade for more than half of the world’s oil has dropped to $68.34 a barrel, the lowest level since October 2009. Prices declined 18 per cent last month and are 38 per cent lower in 2014.
Shares of SpiceJet also surged after ace investor Rakesh Jhunjhunwala’s Rare Enterprises picked up 75 lakh shares of the company for more than Rs 13 crore through open market.