Share price of Jet Airways has almost doubled in the last three months on expectations that continuing troubles at rival SpiceJet will help it gain market share.
Besides, falling international crude oil prices have also helped the rally in the stock.
Share price of Jet Airways rose by 98 per cent from Rs 223.05 on September 1 to today’s closing price of Rs 441 apiece. The stock touched one-year peak of Rs 458 in early trade today.
Since August, ATF prices have been cut by 14.5 per cent or Rs 10,218.76 per kl and rates have dipped below Rs 60,000 per kl level for the first time in three years.
Jet fuel accounts for more than 40 per cent of an airline’s operating costs and falling prices will ease the financial burden of carriers.
Marketmen said that SpiceJet’s plight has somewhat led to Jet Airways’ gain.
Cash-strapped SpiceJet has cancelled over 1,800 flights across the country for the current month, in signs of mounting troubles for the budget airline.
Concerned over the deteriorating condition of SpiceJet and large-scale flight cancellations, aviation regulator DGCA had on Friday withdrawn 186 of its slots and asked it to clear salary dues of all its employees within the coming 10 days.
Union Civil Aviation Minister Ashok Gajapathi Raju also last week raised serious concern over the financial health of the domestic airline.
Also there were reports in the media that with budget carrier SpiceJet wobbling amid fund drought and the aviation regulator keeping a close tab on its curtailed operations, the no-frill carrier’s pilots are flocking to other airlines in search of a job.