IndiGo, SpiceJet share price dip up to 5%: route-specific capping of airfare
Share prices of Airlines as InterGlobe Aviation, SpiceJet and even Jet Airways declined 2-5% on Friday. The news flow remained strong around route-specific capping of airfares being suggested by a parliamentary panel.
CNBC- TV 18 referring to PTI report has said that Parliamentary panel proposes route-specific capping of airfares, the panel proposes setting up of a separate entity to control air ticket prices.
The Parliamentary Standing Committee on Transport, Tourism and Culture in its report tabled on Thursday is said to have spelt out the measures that can be taken by the government on its recommendations and observations on the issue of fixing airfares.
While InterGlobe Aviation share price slipped almost 5% before seeing a recovery, share of Spice jet was down up to 4%. Even Jet Airways share price e Jet share price declined more than 2%.
The operational airlines as InterGlobe Aviation and Spice Jet have benefited for tight supplies as GoAir planes were grounded amidst cash crunch.
The airlines are expected to report good Q3 performance. Analysts at Elara Securities had pegged its aviation coverage universe companies as InterGlobe Aviation and (Indigo) and SpiceJet reporting a combined adjusted net profit of ₹1760 Crore in Q3FY24 versus ₹420 crore in Q2FY24 and ₹2230 crores in Q3FY23. referring to Directorate General of Civil Aviation (DGCA) data, The said that Q3FY24 domestic demand was up 9% YoY while domestic capacity was up 11% YoY, which led to a 2% fall in airfare.
Analysts at Elara had said that FY25 may continue to see robust demand growth of 15% if airlines keep airfares under check. The competition as per anlysts comes from ₹ 2250 crore equity infusion in Spicejet, and interest shown by three bidders, including SpiceJet, to revive the grounded GoFirst airline. Also pilot shortage issues are behind for Akasa Air and capacity growth by Tata Group airlines.
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Published: 09 Feb 2024, 12:33 PM IST
