NEW DELHI: Aviation stocks rallied on Friday as air traffic continued to improve from the lows of first and second Covid-19 waves.
Shares of aviation companies had nose-dived last year when the government had banned flights from late March 2020 to late May 2020 to control the spread of coronavirus.
Interglobe Aviation, operator of India’s largest airline IndiGo, gained for the fourth consecutive session on the BSE and touched a fresh all-time high of Rs 2,243 on Friday.
It closed on Friday at Rs 2197, up over 11% from Thursday’s closing. In the last five seasons, IndiGo has rallied 17.50%.
Similarly, shares of SpiceJet rose up to 7.9% to Rs 81.95 intraday. However, it settled 3.42% higher at Rs 78.55.
This surge in aviation stock came after the Directorate General of Civil Aviation (DGCA) reported that 67.01 lakh domestic passengers travelled by air in August, 33.83% higher than 50.07 lakh in July.
IndiGo alone carried 38.16 lakh passengers in August, a 57% share of the domestic market while SpiceJet flew 5.84 lakh passengers, accounting for a 8.7% share.
Passenger load factor, a measure of how much of an airline’s passenger carrying capacity has been used, also improved to 11.8% for IndiGo and 6.7% for SpiceJet in August from the previous month.
“With the gradual resumption of economic activities and restrictions or lockdowns being lifted across the globe, the demand in this sector is expected to bounce back in the coming quarters,” said Likhita Chepa, Senior Research Analyst, CapitalVia Global Research.