IndiGo, SpiceJet shares fall on no relief package,lockdown extension
Published On: Monday, May 18, 2020 | By: Team KnowMyStock
Aviation stocks Indigo and SpiceJet tanked as much as 11 per cent on the BSE on Monday after the government's Rs 20 trillion economic packages disappointed to deliver immediate liquidity support to the bleeding airlines and another extension of the lockdown. The share price of SpiceJet fell 5% to trade at Rs 43.45 per share while that of IndiGo tanked 11.3% to trade at Rs 882 apiece. The aviation industry has been one of the worst affected with the business under a complete shut down at present. Finance Minister Nirmala Sitharaman announced three measures for the sector, on Saturday, India would rationalise its air space for civil aviation purposes which, at present, is capped at 60 per cent. Besides, she said six airports will be privatised, private companies will make an additional investment of Rs 12,000 crore on 12 airports auctioned before, and tax structure will be rationalised for the Maintenance, Repair and Overhaul (MRO) industry.
“These steps are long-term positives, which will boost the cost efficiencies of Indian airlines. However, near-term balance sheet issues continue to pose severe challenges to a majority of Indian airlines,” said brokerage and research firm ICICI Securities in a research note.
Source: Money Control, Business India, Financial Express
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