Airlines seek interest-free credit of $1.5B from Centre; SpiceJet tumbles 2%, Indigo gains

According to Puri, Indian airlines revenue have dropped to around $500M during April - June quarter compared to $3.5B in the same quarter a year ago.

Sep 17, 2020 01:09 IST India Infoline News Service

Aviation stocks were in focus on Thursday as the Civil Aviation Minister in a written statement to parliament has said that the domestic airlines have sought interest-free credit of at least $1.5B from the government. Airliners sought the interest-free credit in order to cope with revenue loss occurred due to Coronavirus pandemic.

On Sensex, SpiceJet stock was trading at Rs52.20 per piece down 1.69% at around 12.55 PM. The company's stock has tumbled to an intraday low of Rs52.05 per piece.

Meantime, Interglobe Aviation (Indigo) stock was trading at Rs1332.90 per piece higher by 1.11% on Sensex. The stock has clocked the day's high of Rs1337.70 per piece.

Puri said in the statement that airlines including Indigo, Vistara, a joint venture between Tata Sons and Singapore Airlines, SpiceJet and state-run carrier Air India, also want the government’s help to persuade aircraft lessors to ease leasing terms, as well as a deferment of taxes and abolition of excise duty on aviation fuel, reported by Reuters.

The minister further reportedly said that the airlines are appealing to banks and other lenders to defer repayment of loans to the aviation industry by six months.

According to Puri, Indian airlines revenue have dropped to around $500M during April - June quarter compared to $3.5B in the same quarter a year ago.

Airlines were among few sectors that were severely impacted due to Covid-19 nationwide lockdown which began in late March. India banned air travel on the both domestic and international front for passengers. However, after more than 2 months, the travel ban was removed on the domestic route for airlines with precautions. This has led to a huge impact on the sector's earnings. 

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