Shares of the aviation sector fell today after the price of aviation turbine fuel (ATF), or jet fuel, in Delhi was hiked by Rs 1,039.1 per kilolitre (kl), or 1.7%, to Rs 62,208.18.
The shares of the Kingfisher Airlines was trading lower by 1.11%, SpiceJet was down by 1.57% and Jet Airways India down 1.26% on BSE at 11.40 am IST.
The hike in ATF will build more pressure on the cash-strapped airlines as ATF accounts for majority of the operating cost.
However, Directorate General of Civil Aviation (DGCA) has advised all Airlines to ensure that the airfares remain within the fare band. In view of the media reports about increase in airfares over the last few days, the DGCA had done study of airfares and concluded that the airfare offered by various scheduled domestic airlines on different sectors remained within the fare bands available on their respective websites, said in the press release.
In the last 15 to 20 days airfares of flights to and from Delhi have gone up on account of increased User Development Fee (UDF) and Service Tax. Fares for 14 days in advance of the journey are still available in the lowest fare buckets. Random monitoring of airfares by DGCA has not revealed an alarming trend, added further.