Aviation stocks tumble on no relief package, suspension of flights till May 31

Another extension of the lockdown and disappointment with the stimulus package saw the Sensex tank 942.20 points, or 3.03%, to 30,155.53 while the Nifty slipped 271.50 points, or 2.97%, to 8,865.35 in the intraday trade on May 18.

Finance Minister Nirmala Sitharaman on May 16 announced three measures for the aviation sector but none of these may ease the stress the industry is facing, executives say.

Share price of Interglobe Aviation cracked more than 12 percent while SpiceJet was down 5 percent. Share price of the latter hit lower circuit on BSE where there was pending sell orders of 156,044 shares, with no buyers available.

The aviation industry has hit turbulence with the restriction on the movement of people bringing travel to a halt in most parts of the world. The extension of lockdown also means that there will be no domestic or international commercial flights till May 31.

Only domestic air ambulances, flights for medical and security purposes and repatriation flights by Air India will be allowed in the period, the home ministry said in a circular.

The measures announced by Sitharaman in the fourth tranche of stimulus included opening up the air space to reduce commute time and save fuel.

"Right now 60 percent of the air space is freely available as the air space is restricted for defence purposes. All these years we have been flying to destinations through longer routes. This has to be rationalised as customers end up paying more," the finance minister said.

This is unlikely to cheer airlines which grounded their fleet when the government first announced a nationwide lockdown on March 24.

Most of the carriers, including IndiGo, GoAir and SpiceJet, have been forced to cut salaries or sending staff on leave without pay.

After there was no mention of a package for aviation, CII President Vikram Kirloskar on May 16 told CNBC-TV18 that the industry body would approach the government again for a bailout package.

Date: May 19