Aviation shares gain as govt lifts freeze on overseas flights

Shares of aviation companies such as Jet Airways and SpiceJet are trading higher by 3% each on report that the civil aviation ministry has allowed increasing utilisation of foreign bilateral rights for Indian carriers to 40%, roughly equal to the utilisation by foreign carriers, from the summer schedule, starting April.

“Indian carriers are utilising only 22.7% of the total foreign bilateral rights and foreign carriers were much ahead. The ministry has not been allowing airlines to fly abroad, to protect the interest of government-owned Air India, a loss-making concern," the report suggests.

Meanwhile, the Indian aviation sector might see one of its strongest fourth quarters in FY12, as a fall out of Kingfisher reducing capacity and resultant upward movement of yields, says a report by Kotak Institutional Equities. Kingfisher has reduced 12% of the total capacity of the industry in terms of seats available per kilometre in its present phase.

SpiceJet is trading higher by 4.4% at Rs 22.55 and Jet Airways by 3.3% at Rs 341 on the Bombay Stock Exchange.