SpiceJet Shares Tank 7% on Airfare Hikes as ATF Price Soars; IndiGo Skids 5.5%

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SpiceJet Shares Tank 7% on Airfare Hikes as ATF Price Soars; IndiGo Skids 5.5%

By Malvika Gurung

Investing.com -- The Indian low-cost airline SpiceJet (NS: SPJT ) has called for a hike in airfares by up to 15%, as aviation turbine fuel prices have jumped by 16.3%, hitting a lifetime high of Rs 1.41 lakh/kilo Litre in Delhi on Thursday, and the depreciating rupee is denting the company’s operational costs.

Fuel comprises almost 50% of an airline’s cost of operations and today’s sharp price uptick in conjunction with a weak rupee against the greenback, is making it unsustainable for operations, said the airline’s Chairman and MD Ajay Singh.

“We believe that a minimum 10%-15% increase in fares is required to ensure that cost of operations are better sustained,” Singh stated and has asked the federal and state governments to take immediate actions and cut taxes, which are amongst the highest in the world.

ATF prices have rallied 91% in the past 6 months and almost doubled so far in 2022. Singh added that the prices have soared past 120% in a year.

Shares of SpiceJet tanked 6.5% to Rs 41.15 apiece at 2:40 pm, after falling to hit a fresh 52-week low of Rs 40.95 apiece on Thursday.

Shares of airline company IndiGo (NS: INGL ) also plummeted 5.42% at the time of writing.

Read Also: Air Travel Could Get More Expensive as Jet Fuel Hits Lifetime High

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