Stocks of aviation companies — InterGlobe Aviation (IndiGo), Jet Airways, SpiceJet, and Global Vectra — traded mixed on Thursday after the prices of aviation turbine fuel (ATF) were cut by 0.7 percent to Rs 1.21 lakh per kilolitre in Delhi.
The government hiked the windfall profit tax on jet fuel exports with effect from September 1. The tax on ATF exports has been hiked to Rs 9 per litre from Rs 2 per litre.
Shares of IndiGo's parent company, InterGlobe Aviation, rose over a percent, and touched an intraday high of Rs 2,037.9 on Monday. Jet Airways stock climbed 0.9 percent.
SpiceJet, however, fell more than 14 percent, a day after the company reported its financial results for the April to June 2022 quarter. Global Vectra Helicorp fell almost three percent.
The government released a notification late Wednesday night announcing a hike in windfall profit tax on the export of diesel and on jet fuel exports. The government has also raised the levy on domestically-produced crude oil amid a hardening of global prices at the fourth fortnightly review.
The government had also removed the airfare caps on domestic flights with effect from August 31. The airlines now have the flexibility to regulate their fares for passengers.
The government had imposed a lower and upper limit on the fares of domestic flight tickets in May 2020, according to which airlines couldn’t charge a passenger less than Rs 2,900 (excluding GST) and more than Rs 8,800 for domestic flights with a total duration of 40 minutes or less.The decision to remove air fare caps has been taken after careful analysis of daily demand and prices of air turbine fuel. Stabilisation has set in & we are certain that the sector is poised for growth in domestic traffic in the near future. https://t.co/qxinNNxYyu
— Jyotiraditya M. Scindia (@JM_Scindia) August 10, 2022
These limits were imposed to protect economically weaker carriers and passengers from being overcharged when the nation was battling COVID-19 resultant economic crisis.
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