Smooth take-off for aviation stocks unlikely  

Smooth take-off for aviation stocks unlikely  

The chaos and difficulty in resuming operations have dented gains made by aviation sector stocks last week.

Published: 27th May 2020 09:55 AM  |   Last Updated: 27th May 2020 09:55 AM   |  A+A-

Express News Service

NEW DELHI: Early last week when aviation minister Hardeep Singh Puri announced that India would open its domestic sky from May 25, the move was widely welcomed by the crises-hit aviation sector who had little or nothing to receive from the government’s Rs 20 lakh crore stimulus package. Soon after, share prices of IndiGo and SpiceJet jumped and immediate bookings in large numbers were made by passengers.

The excitement, however, was short-lived. Stringent quarantine norms announced by some states and restriction on flight operation caused immense pain to passengers on day one. As many as 630 flights were cancelled on day one. The chaos and difficulty in resuming operations dented gains made by stocks last week. Share prices of Indigo and SpicetJet fell 3.40 per cent and 2.22 per cent, respectively on the BSE on Tuesday.

A bigger blow came to the sector, when a passenger travelling in an IndiGo flight from Chennai to Coimbatore on Monday was found to be Covid-19 positive. “This is going to have a big impact on the sentiments of passengers who are already uncomfortable flying at this point of time. If more passengers are found Covid-19 positive in the coming days, we don’t know what steps the Union/State Government might take” said a senior executive of a private carrier.  He added that institutional quarantine announced by some states and delay in opening up operations in states such as West Bengal and Andhra Pradesh is already weighing on the recovery of the sector.