Three aviation stocks fell 0.18% to 1.88% at 11:42 IST on BSE, as a surge in crude oil prices and a weak rupee heightened concerns about the impact of high jet fuel prices on operating costs. SpiceJet (down 1.88%), Jet Airways (down 0.67%) and Kingfisher Airlines (down 0.18%), edged lower. The BSE Sensex was up 43.10 points or 0.29% to 17,114.10. SpiceJet had underperformed the market over the past one month until 7 September 2011, falling 10.91% compared with the Sensex's 1.39% fall. The stock had also underperformed the market in past one quarter, sliding 25.73% as against 7.73% decline in the Sensex. Jet Airways had underperformed the market over the past one month until 7 September 2011, sliding 30.08% compared with the Sensex's 1.39% fall. The scrip had also underperformed the market in past one quarter, falling 33.46% as against 7.73% decline in the Sensex. Kingfisher Airlines had underperformed the market over the past one month until 7 September 2011, sliding 13.04% compared with the Sensex's 1.39% fall. The scrip had also underperformed the market in past one quarter, falling 34.96% as against 7.73% decline in the Sensex. Aviation turbine fuel, or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices. Oil traded near the highest close in more than a month in New York on speculation a storm building in the Gulf of Mexico poses a threat to supplies in the US, which were reduced last week by an earlier cyclone. US crude futures for October 2011 delivery were up 32 cents or 0.36% at 89.66 a barrel. State-run oil marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight. For the second time in one month, state-owned oil firms on 1 September 2011, cut jet fuel price in line with softening of rates in the international markets. Aviation Turbine Fuel (ATF) price at Delhi's T3 airport was cut by Rs. 429 per kilolitre (kl), or 0.75%, to Rs. 56,260 per kl. Earlier, oil companies had from 16 August 2011 cut jet fuel rates by Rs. 1,156 per kl or about 2%. ATF prices vary from airport to airport, depending on the local sales tax or VAT. A weak rupee also weighed on aviation stocks. The rupee today, 8 September 2011, fell to a near one-year low against the dollar dragged by dollar demand from domestic oil companies and weak Asian currencies, with choppy equities also weighing. The partially convertible rupee hit a low 46.2650 in early deals--a level not seen since 16 September 2010. A weak rupee impacts aviation sector adversely as almost a third of operational expenses of aviation firms are denominated in dollars. Among the payments made in dollars, include rentals of leased aircraft, maintenance, spare parts and salary paid out to foreign crew.

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