Aviation stocks surge after govt announces to resume international flight services; IndiGo jumps 7%, SpiceJet gains 5%

Shares of aviation stocks surged up to 7% after the government announced that India will resume international flights to and from India staring March 27, 2022. Scheduled international flight services are suspended in India since March 23, 2020, due to the pandemic. While announcing to resume the service, the Civil Aviation Ministry said that the international operations shall be subject to strict adherence to the Ministry of Health & Family Welfare guidelines for international travel. 

Shares of InterGlobe Aviation Ltd (IndiGo) surged nearly 7% amid spurt in volume, while SpiceJet gained 5% to trade on the BSE.  

At 9.50 am, shares of  InterGlobe Aviation were trading with Rs 1703.05, a gain of 6.44%, on the BSE. IndiGo shares have hit the day's high of Rs 1726.45 on the BSE.  

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Similarly, SpiceJet gained 5% to Rs 60.75 a share.  

Shares of IndiGo and SpiceJet have suffered a major blow due to restrictions on domestic and international flight services during lockdown. As on March 9, IndiGo has traded flat with no gains in the last one year, while this aviation stock has gained marginally by 30% in the last two years, showed technical data of the stock.  

SpiceJet, on the other hand, has traded negatively. The share declined nearly 28% in one year and about 6% in two years.  

The action in the aviation stock comes as the government decided to resume international flight operations, which were closed in March 2020 in view of Covid 19 pandemic.  

However, special international flights have been operating between India and 37 countries since July 2020 under air bubble arrangements. 

Aviation Minister Jyotiraditya Scindia said on Tuesday, "After deliberation with stakeholders and keeping in view the decline in the COVID-19 caseload, we have decided to resume international travel from March 27 onwards." 

Earlier, the government had planned to resume the service in December 2021, but it had to be postponed due to surge in omicron virus.  

International travel capacity is still at pre-covid levels at 40% as against 4700 departures per week in pre-Covid, currently it stands at only 2100 departures per week, said a Zee Business TV report.  

At 54.3%, Air India is the most dominating player in terms of international aviation market share, as per Acuite  research. IndiGo has 28.4% market share in international aviation, whole SpiceJet holds 12.6%