Shares of Aviation companies are trading higher on Wednesday, with Interglobe Aviation, SpiceJet and Jet Airways gaining up to 3%. Just a while back according to news reports, civil aviation secretary R N Choubey said that the Indian Air Force will allow its Hindon base to be used for flights operating to tier-2 and tier-3 cities under the government’s regional connectivity scheme. “This is being done to overcome slot constraints at the Indira Gandhi International Airport,” R N Choubey added.
The stock of Interglobe Aviation Ltd – the parent company of India’s largest airline carrier – IndiGo rose as much as 2.05% to the day’s high of Rs 1,197.85. Shares of Spicejet Ltd gained 2.9% to the day’s high of Rs 129.5 while Jet Airways (India) Ltd advanced 3.36% to the day’s high of Rs 564.45.
The civilian operations from the IAF air base, in Ghaziabad on the outskirts of Delhi, are likely to start during the winter schedule, which comes into effect from the last Sunday of October. The government is in talks with airport operator Delhi International Airport Limited on reworking a rule which disallows two airports within a radius of 150km.
The government’s regional connectivity scheme also known as UDAN (Ude Desh Ka Aam Nagrik) aims at making flying affordable for the masses by capping airfares on selected short routes — such as from Delhi to Shimla — at Rs 2500 per hour of flight. Airlines that are awarded routes under the scheme are offered government subsidy and in return need to set aside 50 per cent of the seating capacity at discounted fares.
Earlier this week the government had released a consolidated FDI policy document for this year. India’s FDI policy allows foreign airlines to own up to 49% stake in domestic passenger carriers excluding Air India, subject to certain conditions.