Airlines stocks surge after aviation ministry increases flight capacity

New Delhi: Airlines and aviation related stocks surged up to 5 per cent on Tuesday, after the Ministry of Civil Aviation raised the cap of flight capacity allowance to 65 per cent from 50 per cent, earlier.

According to airline operators, the air traffic has also increased after the unlock announcement by various states. However, the rising fuel prices, expensive tickets and looming fears of a third wave are likely to make sentiments jittery.

Shares of Spicejet gained 4 per cent to Rs 82, whereas Interglobe Aviations, the operator of Indigo soared 3 per cent to Rs 1810 on Tuesday. The counter settled at Rs 79.10 and Rs 1756.90, respectively on Monday.

Similarly, Global Vectra Helicorp gained per cent to Rs 52.70 and TAAL Enterprises gained 4 per cent to Rs 719.35. However, Jet Airways hit lower circuit, shed 5 per cent to Rs 108.45.

The airline stocks have witnessed a rebound with partial resumption of travel and amid mass vaccination drive. The recent increase in flight capacity from 50% to 65% may further add some tailwind.

Carriers have been operating with only 50 per cent of their pre-COVID domestic flights since June 1 in accordance with a May 28 order of the ministry.

The May 28 decision to bring down the cap from 80 per cent to 50 per cent was taken on the back of the lethal second wave of COVID-19 pandemic cases across the country.