Jet Airways, SpiceJet rally upto 20% on falling crude oil price

NEW DELHI: Airline stocks such as Jet Airways, SpiceJet surged in trade on Friday, after Brent crude oil plunged as much as $6.50 a barrel, and US crude dropped by nearly as much, posting their steepest one-day falls since 2011.

Brent crude oil prices came under pressure after OPEC decided against cutting output despite a huge oversupply in world markets. Benchmark Brent futures were down by $5.20 a barrel at $72.55, after hitting a four-year low of $71.25 earlier in the session.

Reacting to the news, Jet Airways surged as much as 19.99 per cent to touch its intraday high of Rs 322.05, while SpiceJet rallied as much as 7 per cent to hit its intraday high of Rs 16.50.

Aviation turbine fuel (ATF) is linked to international crude oil prices. ATF or jet fuel constitutes about 40 per cent of airlines' operating cost. Hence, a fall in ATF price prices will improve profitability and margins.



At 09:40 a.m.; Jet Airways was trading 12.6 per cent higher at Rs 302.40. It hit a low of Rs 286.30 and a high of Rs 302 in trade today.

SpiceJet was trading 5.7 per cent higher at Rs 16.30. It hit a low of Rs 15.80 and a high of Rs 16.50 in trade today.