Aviation stocks rejoice as govt allows to resume biz from May 25; Indigo soars 10%, SpiceJet clocks upper circuit

Standard operating procedure (SOP) for passengers movement is also being separately issued by the Ministry of Civil Aviation.

May 21, 2020 10:05 IST India Infoline News Service

Investors gave thumbs up to the government's decision for allowing airports and airlines to resume operations from next week, by outpouring their love in low-cost carrier stocks like Interglobe Aviation (Indigo) and SpiceJet. The Indigo shares even clocked over Rs1,000 price level.

Here's how aviation stocks are performing on Thursday:

SpiceJet:

The Gurugram-based airliner was trading at an upper circuit limit of Rs42.95 per piece on Sensex up by nearly 5% at around 10.07 am.

In the previous closing, the SpiceJet stock had ended at Rs40.95 per piece.

Indigo:

This low-cost carrier's share price has skyrocketed by a whopping 10%, as it commenced Thursday's trading session at an intraday high of Rs1002 per piece on Sensex.

At around 10.10 am, Indigo share price was trading at Rs986.60 per piece up by Rs74.70 or 8.19% on Sensex.

The share ended at Rs911.90 per piece during Wednesday's trading session.

Here's why!

On Wednesday, Hardeep Singh Puri, Civil Aviation minister tweeted saying, domestic civil aviation operations will recommence in a calibrated manner from Monday 25th May 2020.

He has asked all airports & air carriers are being informed to be ready for operations from 25th May.

Further, Puri added that standard operating procedure (SOP) for passengers movement is also being separately issued by the Ministry of Civil Aviation.

The announcement comes as a major booster for air carriers as they were the most hit since India entered into lockdown from March 25, because of travel ban domestically and internationally.

During January to February 2020, passengers carried by domestic airlines were to the tune of 251.50 lakhs as against 238.56 lakhs during the corresponding period of the previous year. This reflects an annual growth of 5.42%and monthly growth of 8.98%.

By February 2020 end, Indigo holds the largest market share of 47.9% in the industry, followed by SpiceJet at 16%, Air India at 11.8%, GoAir at 9.9%, Air Asia at 7.1% and Vistara at 6.6%.

Once airliners become operational, the jet fuel consumption demand will also be uplifted as it has dropped by over 91% till April 2020. 

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