Aviation Stocks Take Off As Oil Slump Continues: SpiceJet Hits 52-Week High
Indian aviation stocks rose on Wednesday, buoyed by a slump in crude oil prices. Spicejet shares rose as much as 4.27 per cent to a fresh 52-week high of Rs 132, Interglobe Aviation Ltd, the holding company of Indigo Airlines, rose about 2 per cent and Jet Airways rose 3.3 per cent. Global crude oil prices fell nearly 2 per cent overnight to its lowest settlement since November. Fuel constitutes nearly 40 per cent of the total cost of aviation companies so falling crude oil price will improve the profitability of airlines, say analysts.
Meanwhile, sentiment also remained positive after domestic air traffic registered a 17.36 per cent growth to 102 lakh passenger sin the previous month. Domestic air traffic has been growing in double digits for more than two years and touched a peak of 25.13 per cent in January this year.
Due to rise in demand, SpiceJet, IndiGo, GoAir and Jet Airways have plans or firmed up orders for over 800 new planes in the past month.
No-frills budget carrier Spicejet inked initial pacts yesterday and today for orders of up to 60 new planes. This includes 20 latest Boeing 737 MAX 10 aircraft and 40 Q400 turboprop planes from Bombardier.
As of 2:17 pm, SpiceJet shares traded 3.91 per cent higher at Rs 131.55, while Jet Airways and InterGlobe Aviation shares were up 3.3 per cent and 1.54 per cent respectively.
