Jet Airways (India) was up 5% at Rs 552, while InterGlobe Aviation was up 4% at Rs 1,152 in intra-day trade. In comparison, the S&P BSE Sensex was down 0.40% or 122 points at 30,004 at 10:11 am.
Lower crude oil prices benefit aviation firms as jet fuel prices, which typically constitute a majority of airlines' operating costs, are directly linked to international crude oil prices.
Indian aviation companies with around 65% of their costs linked to USD (Aviation Turbine Fuel and aircraft leasing/maintenance costs) could be the biggest beneficiaries of rupee appreciation.
“A stronger rupee coupled with the reversal in crude prices (post some uptick in H2FY17) bodes well for the aviation companies that had been impacted by cost and pricing pressures in FY17. If these early trends for Re and crude were to continue for a major portion of FY18, we expect earnings for aviation companies to see substantial upgrades, given that their profitability is highly sensitive to these variables,” analyst at SBICAP Securities said in recent report.
OPEC is scheduled to meet on May 25 to decide whether to extend the cuts.