New Delhi: The buzz among the optimists in the aviation sector is that some airlines could report improved results for the quarter ended December, numbers for which will be out soon. Both Jet Airways and SpiceJet, the two carriers listed on the stock market, have seen a sharp rise in their share price in the last one month. While Jet Airways has soared 30.5 per cent, SpiceJet, which is in the midst of changing hands from the Maran family to a group of investors led by Ajay Singh, has recorded a gain of 17 per cent. If aviation industry executives are to be believed, the current quarter will be even better - "simply rocking". Of course, given the troubled history of the industry, it means the airlines will break even or make some money, that too unless nobody launches a foolhardy tariff war.
The biggest contributor to the turnaround is the dramatic drop in the prices of aviation turbine fuel, or ATF, which constitutes 50-55 per cent of an airline's operating costs. As oil producing countries pump out huge quantities of crude oil, apparently in a bid to finish off the nascent shale gas sector, ATF prices have fallen sharply in the last four months: from Rs 67,500 a kiloliter in October to Rs 52,000 now, a drop of 22 per cent. In the December-ended quarter, ATF, on an average, was 14.3 per cent cheaper than the year-ago quarter. In the current quarter, the expectation is that it will be 24 per cent cheaper when compared to the same quarter of the previous financial year.
28/01/15 Surajeet Das Gupta/Business Standard
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The biggest contributor to the turnaround is the dramatic drop in the prices of aviation turbine fuel, or ATF, which constitutes 50-55 per cent of an airline's operating costs. As oil producing countries pump out huge quantities of crude oil, apparently in a bid to finish off the nascent shale gas sector, ATF prices have fallen sharply in the last four months: from Rs 67,500 a kiloliter in October to Rs 52,000 now, a drop of 22 per cent. In the December-ended quarter, ATF, on an average, was 14.3 per cent cheaper than the year-ago quarter. In the current quarter, the expectation is that it will be 24 per cent cheaper when compared to the same quarter of the previous financial year.
28/01/15 Surajeet Das Gupta/Business Standard
