Centre recommends interest payment from airlines for delayed refunds; Aviation stocks in a bloodbath

Reportedly, the apex court deferred the hearing of the case for a refund of air tickets booked during lockdown period till September 25.

Sep 24, 2020 02:09 IST India Infoline News Service

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Aviation stocks like Interglobe Aviation (Indigo) and SpiceJet witnessed huge selling pressure on Thursday, tracking the overall downside curve of benchmark indices. However, the performance also comes after the Directorate General of Civil Aviation (DGCA) said that air passengers who have booked flights during nationwide lockdown are eligible for refunds. The ministry informed this to the Supreme Court.

The top court heard the recommendations of the government and also airlines plea in the matter of interest payment for delayed refunds.

According to ET Now Digital report, the government recommended that airlines pay 0.5% interest for delayed refunds.

This was opposed by Vistara and AirAsia. In both the airlines, Tata Group holds a majority stake.

While low-cost carrier GoAir reportedly pleaded the apex court that airlines were on the brink of collapse and might shut down if the situation doesn't improve.

On the other hand, Indigo reportedly commented saying that they refunded the tickets for the lockdown period in full.

It is being known as per the report that the government also said it is open to considering the interest of any particular segment of passengers if adversely affected.

Reportedly, the apex court deferred the hearing of the case for a refund of air tickets booked during lockdown period till September 25.

At around 2.06 pm, SpiceJet stock was trading at Rs46.80 per piece down 3.31%, while Indigo stock is down by 5.82% and trading at Rs1,208 per piece on Sensex. Indigo stock has plunged by a whopping 7% so far on Sensex with the day's low of Rs1,191.10 per piece.

As of August 2020, SpiceJet holds a market share of 13.8, while GoAir holds 4.7% and state-owned carrier Air India holds about 9.8% market share. Vistara and AirAsia hold a market share of 6.8% and 5% respectively. Meanwhile, Indigo maintains leadership in the industry with a market share of 59.4%. 

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