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SpiceJet shares jumped more than 11 per cent in the morning trade after the no-frills airline filed an application with the Director General of Foreign Trade (DGFT) seeking permission to directly import aviation turbine fuel (ATF).
When permitted, the direct imports will considerably bring down the airline’s operational cost.
The scrip opened at Rs 24.70, then rallied 11.15 per cent to an early high of Rs 26.90 on the BSE. It was later trading at Rs 26.20, up 8.26 per cent on the BSE.
SpiceJet is the first airline to make such a move, after the Government in end-February issued the notification allowing private airlines to import jet fuel or ATF directly.
Airlines have been demanding permission to get fuel supplies from overseas so that they do not have to pay sales tax that are as high as 30 per cent in some states.
Jet fuel, which makes up for about 40 per cent of an airline’s operating expenses, costs the most in the region. The airline industry is facing financial crisis. The high operating cost of the sector is largely attributable to the cost of ATF.
SpiceJet operates 270 flights daily to 32 Indian cities and two international destinations.
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