IndiGo, SpiceJet tank over 5% as govt prohibits them from booking tickets

Shares of InterGlobe Aviation-run IndiGo, and SpiceJet declined over 5 per cent on the BSE on Monday after the government prohibited the airlines to book tickets until further notice from the government. 

Individually, stock of IndiGo slumped 5.47 per cent to Rs 1,010.65 on the BSE, while stock of SpiceJet slipped nearly 3 per cent to Rs 47.25 on the index. In comparison, the S&P BSE Sensex was at 31,632 level, up 0.14 per cent at 9:50 am. 

As per a directive issued by aviation watchdog Directorate General of Civil Aviation (DGCA), all airlines have been prohibited from taking bookings till a final decision on lifting or easing restrictions on resuming air travel is announced. “It is brought to the notice of all concerned that no decision to commence flights on May 4 has been taken. All airlines are directed to refrain from booking tickets,” the DGCA order said. READ HERE

The directive came after airlines, including IndiGo and Air India, annnounced commencement of air travel on select routes from May 4, the day the second lockdown is scheduled to end. Soon after Prime Minister Narendra Modi announced the extension of lockdown till May 3, Ronojoy Dutta, chief executive officer of IndiGo said that the airline would restart flight operations on vital corridors of air traffic from May 04, 2020. "We will begin operations for domestic only and then gradually ramp it up further, to commence operations on some international routes as well," he said.

Besides, state-run Air India, too, had opened bookings for select domestic flights from 4 May onwards and for international flights from 1 June onwards. 

However, despite the direcitve, it was only government-owned Air India which closed bookings after the minister’s tweet, while private airline executives said it was mere “advisory” and not a “binding order”.

That apart, aviation minister Hardeep Singh Puri said in a tweet on Sunday that airline services shall remain suspended even after the lockdown is lifted on May 3.

What further aggravated the selling pressure at the counters was another directive by DGCA which asked airlines to refund the ticketing amount for all the cancelled flights.

"If a passenger has booked a ticket during the first lockdown period (from 25th of March to 14th of April, 2020) and the airline has received payment for booking of the air ticket during the first lockdown period for travel during the same period, for both domestic and international air travel and refund is sought by the passenger against that booking being cancelled, the Airline shall refund the full amount collected without levy of cancellation charge. The refund shall be made within a period of three weeks from the date of request of cancellation," said DGCA in a circular. READ HERE

The Ministry of Civil Aviation has also said that airlines will have to refund air travellers for any booking made during the lockdown period of March 25-April 14 for travel between April 15 and May 3.