1. Airline stocks gain as government proposes draft aviation policy

Airline stocks gain as government proposes draft aviation policy

Shares of aviation companies came into limelight on Friday after the government proposed to hike FDI limit in domestic airlines to over 50 per cent in open skies policy.

By: | Updated: October 30, 2015 3:53 PM
Aviation stocks FDI Limit

Shares of aviation companies came into limelight on Friday after the government proposed to hike FDI limit in domestic airlines to over 50 per cent in open skies policy. (Reuters)

Shares of aviation companies came into limelight on Friday after the government proposed to hike FDI limit in domestic airlines to over 50 per cent in open skies policy.

Shares of Jet Airways closed 9.34 per cent up at Rs 436.70. SpiceJet shares surged 8.47 per cent at Rs 46.75 on Friday. The key benchmark index, BSE Sensex closed 0.68 per cent down at 26,656.83.

Under open skies policy, overseas airlines can operate unlimited number of flights into and out of India.

In another announcement, the government also proposed to impose an additional levy of 2 per cent on all domestic and international tickets to pay for the regional connectivity boost, said civil aviation secretary RN Choubey, while presenting the country’s draft aviation policy. Aviation secy expects to collect Rs 15,00 crore per annum from 2 per cent cess on tickets to pay for regional connectivity push.

Government also plans to boost regional aviation connectivity and reopen closed airports, civil aviation secretary said, as part of its plans to improve passenger growth in one of the world’s fastest-growing yet fiercely competitive aviation markets.

The policy comes as airline passenger numbers increase 20 per cent a year to 38.8 million in the first half of 2015, leaving India’s major airports, which account for four-fifths of traffic, saturated.

(With inputs from Reuters)

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