Airline stocks such as Spicejet, InterGlobe Aviation and Jet Airways, were in focus today after India joined the list of countries suspending flights from the UK amid new coronavirus strain fears.
Airline stocks were in focus today after India joined the list of countries suspending flights from the UK amid new coronavirus strain fears. Spicejet, InterGlobe Aviation and Jet Airways stocks hit their respective lower circuits today. India has suspended all passenger flights connecting to the UK from Wednesday till December 31. The Civil Aviation Ministry also said that the passengers coming from the UK through flights till Tuesday midnight would be tested for COVID-19 on arrival at airports as a measure of abundant precaution. Binod Modi, Head Strategy, Reliance Securities, told Financial Express Online that while India had yet not opened complete operation of International flights, selected international flights were permitted only under ‘air bubble’ agreement with select countries including the UK.
Hence, fresh suspension of inbound flights from UK may not necessarily result in huge revenue loss aviation companies. “However, this will certainly lead to further delay in the commencement of international flights operation, which will weigh on investors’ sentiments. Additionally, any sign of spreading new coronavirus strain in India may also impact domestic operations for aviation companies, which does not augur well for the industry,” Modi added.
Spicejet share price fell 10 per cent to hit a lower circuit at Rs 82.35 apiece on the BSE in the early morning trade. Since Friday, the stock has fallen 18.58 per cent. Last week, SpiceJet announced to restart SpiceShuttle seaplane flight services in Gujarat from December 27, 2020. The flight services will operate between Ahmedabad’s Sabarmati Riverfront and Kevadia’s Statue of Unity with two daily flights on the route.
Similarly, InterGlobe Aviation shares were locked in 10 per cent lower circuit at Rs 1,356.40 apiece on BSE in morning deals. Civil Aviation Minister Hardeep Singh Puri said in a tweet that the passengers who are found COVID-19-positive would be sent for institutional quarantine set up by states or union territories (UTs). While those found negative should be advised to isolate at home for seven days and will be medically monitored by states/UTs.
Countries such as Canada, Turkey, Belgium, Italy and Israel have already banned flights from the UK after the British government warned that the potent new strain of the virus was out of control. Jet Airways share price also slipped 5 per cent to touch lower circuit at Rs 100.70 apiece on BSE, taking the total market capitalisation of the firm to Rs 1,143.93 crore. In comparison, S&P BSE Sensex was trading 241 points or 0.55 per cent at 45,303.50 levels.