IndiGo, SpiceJet fly high up to 8% as govt lifts ban on overseas flights

Shares of airline companies InterGlobe Aviation – parent company of the low-cost airline IndiGo, and SpiceJet gained up to 8 per cent on the BSE in Wednesday’s intra-day trade after the government announced resumption of international flights from March 27, 2022. The move is expected to boost international capacity and will help soften airfares, which have been soaring due to increased demand and rise in crude oil prices.

Among the individual stocks, IndiGo surged 8 per cent to Rs 1,722 and SpiceJet 7 per cent to Rs 60.75 in intra-day trade. In comparison, the S&P BSE Sensex was up 0.73 per cent at 53,814. In the past one month, shares of Indigo declined 27 per cent, as compared to near a 8 per cent fall on the benchmark index. The stock of SpiceJet hit a 52-week low at Rs 53.30 on Monday, March 7, 2022.

Scheduled international passenger flights will resume on March 27, two years after a ban was imposed to prevent Covid-19 cases from spreading. The government had banned all international scheduled flights for a week starting March 23, but it stretched to nearly two years in the midst of a raging pandemic. The civil aviation ministry on Tuesday announced the resumption of such flights and an end to air transport bubbles, which replaced regular scheduled flights over the past two years, the Business Standard reported. CLICK HERE FOR FULL REPORT

Analysts believe IndiGo continues to remain better placed than its peers and is likely to emerge stronger post Covid given superior balance sheet, industry leading cost structure and strong management team. However, rising crude environment remains a worry.