ATF price hike leave Jet Airways and Interglobe in red
DSIJ Intelligence / 01 Jun 2016
JET Airways and Interglobe aviations are trading in negative territory due to reports of government deciding to increase Aviation Turbine Fuel (ATF) by 9.2 per cent to Rs. 46,729.48/kl.
JET Airways and Interglobe aviations are trading in negative territory due to reports of government deciding to increase Aviation Turbine Fuel (ATF) by 9.2 per cent to Rs. 46,729.48/kl. ATF is an aviation fuel designed for use in aircrafts powered by gas-turbine engines.
Both Jet Airways and Interglobe are down even as broader market is trading in green with Nifty up by almost 54 points cheering the latest GDP data, which suggested Indian economy grew by 7.9 per cent in the March quarter.
The fuel prices are very important for the profitability of the Airline companies and the increase in ATF prices will simply not aide the airline companies' profitability. In last quarter alone i.e between January- March quarter of FY16, Jet airways was able to save on low fuel cost where the fuel expenses fell by 25 per cent.
It may be noted that the petrol and diesel prices have been hiked by Rs. 2.58 per litre and Rs. 2.26 per litre respectively. The fuel prices were previously increased on May 17.
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