Stocks of aviation companies plunged in morning trade on Thursday after an increase in their import duty burden. The government on Wednesday night introduced a 5 percent basic customs duty on aviation turbine fuel (ATF) that is used to fly airplanes along with an increase in rates for 18 other items.
This duty is applicable from the midnight of 27 September, which means the expenses of air carrier have already been increased by Rs 2,000 per kilolitre (approx as per current rates).
Shares of domestic carriers like InterGlobe Aviation (IndiGo), Jet Airways and SpiceJet fell in the morning session. While prices of Interglobe Aviation stocks fell by 4.3 percent to Rs 818 a piece, the shares of Jet Airways and SpiceJet plunged to new 52-week lows after a 6 percent and 3.5 percent slump respectively.
Jet Airways' new 52-week is now Rs 173.15 a piece. Apart from the rise in costs, the airlines had defaulted salary payments to its employees once again for the month of August. "Jet Airways today remitted half of the second installment of pending emoluments of its pilots, AMEs and senior management for August 2018," it said in a statement yesterday.
SpiceJet fell to a new 52-week low of Rs 66.70 a piece. The carrier has announced several new flight routes this week, including an international flight to Hong Kong.