Domestic Aviation Fuel Prices Remain Unchanged, Focus on IndiGo and SpiceJet Shares Continues

Aviation Fuel Prices Remain Unchanged for Domestic Carriers

Shares of InterGlobe Aviation and SpiceJet are likely to remain in focus on Monday after aviation turbine fuel (ATF) prices were kept unchanged for domestic carriers. State-owned Indian Oil Corporation announced early on Friday that ATF prices for scheduled domestic airlines have not been revised, providing some relief to the sector.

The unchanged domestic fuel prices are expected to support operating costs for airlines such as InterGlobe Aviation, the parent of IndiGo, and SpiceJet, as fuel accounts for a significant portion of their expenses. This could have a bearing on investor sentiment when trading resumes.

However, ATF prices for international airlines have been increased by $76.55 per kilolitre to $1,511.86 per KL from $1,435.31 per KL. The price revisions have been limited to select industrial segments, which constitute a relatively small share of overall consumption and are subject to routine monthly adjustment based on prevailing international prices.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The unchanged domestic fuel prices are expected to have a positive impact on the shares of InterGlobe Aviation and SpiceJet. On Thursday, shares of InterGlobe Aviation settled over 1 percent lower at Rs 4,295.30, while SpiceJet shares declined 4.37 percent to close at Rs 13.36 per share on the BSE.

Equity markets were closed on Friday on account of Maharashtra Day. Amid ongoing tensions in the West Asia region and the resulting pressure on oil prices, there were concerns that aviation turbine fuel (ATF) prices may increase.