MUMBAI: Shares of two listed aviation companies InterGlobe Aviation and SpiceJet on Thursday rallied 5% and 13% respectively after the government announced that domestic airline operations would resume from 25 May.
Shares of InterGlobe Aviation Ltd, which runs IndiGo, were at ₹1,029 and Spicejet Ltd rose to ₹42.95 on the BSE, while the benchmark index, Sensex gained 0.77% to 31057.09 points.
In some respite to the beleaguered sector, the civil aviation ministry has said domestic flight will resume operations from 25 May in a calibrated manner.
The ministry also stated that the government has intimated all airports and airline companies to gear up to start operations from the scheduled date and the standard operating procedures for passenger movement will follow shortly. Commercial flights had been suspended since 25 March when the nationwide lockdown was imposed to contain covid-19. Only cargo flights and special flights were allowed to operate.
The latest and fourth phase of the lockdown will run till 31 May.
“The resumption of flights after two months of being grounded will offer some temporary relief to the airlines industry as it will not be completely non-operational but it does not mean it will be able to stimulate the needed passenger traffic given how the virus is showing no signs of abating," CARE Ratings said in a note.
However, the credit rating agency still believes that the passenger traffic will decline by 30% during the current financial year as there will be certain inhibitions and apprehensions of travelling besides restrictions of the capacity that can be used on flights. Passenger traffic has grown by 13.7% during FY2018-19 and 0.7% during FY2019-20, it added.