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SpiceJet, Jet Airways fly 6-7% high on fuel price cut

Hailing it as good news, Sanjiv Kapoor,COO, SpiceJet said that ATF prices in India is 40-60 percent higher than rest of the world. In an interview to CNBC-TV18 he added revenues have improved significantly due to festive season discounts and load factor has improved to 86 percent in September.

November 03, 2014 / 03:24 PM IST
 
 
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Moneycontrol Bureau


Shares of aviation stocks are flying as aviation turbine fuel (ATF) rates are cut by a steep 7.3 percent, the fourth straight reduction in prices since August on back of falling international oil rates. SpiceJet was up 7 percent while Jet Airways soared 6 percent intraday on Monday.


Hailing it as good news, Sanjiv Kapoor,COO, SpiceJet said that  ATF prices in India is 40-60 percent higher than rest of the world. In an interview to CNBC-TV18 he added revenues have improved significantly due to festive season discounts and load factor has improved to 86 percent in September.


The price of aviation turbine fuel (ATF), or jet fuel, at Delhi was cut by Rs 4,987.7 per kilolitre, or 7.3 percent, to Rs 62,537.93 per kl, oil companies announced today.This is the fourth reduction in jet fuel rates since August. Rates were cut by almost 3 per cent or Rs 2,077.62 per kl on October 1. Declining international oil prices have made imports cheaper, resulting in price reduction. In Mumbai, jet fuel will cost Rs 64,414.98 per kl from today as against Rs 69,610.50 per kl previously. The rates vary because of differences in local sales tax or VAT.


Jet fuel constitutes over 40 percent of an airline's operating costs and the price cut will ease the financial burden of cash-strapped carriers. No immediate comment was available from airlines on the impact of the price cut on passenger fares.

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At 09:24 hrs SpiceJet was quoting at Rs 14.48, up Rs 0.55, or 3.95 percent and Jet Airways was quoting at Rs 242.00, up Rs 9.75, or 4.20 percent on the BSE.


With inputs from PTI

first published: Nov 3, 2014 09:57 am

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