MUMBAI: SpiceJet Ltd shares are up nearly 50%, while Indigo advanced 29% in November so far after strong data from the Directorate General of Civil Aviation showing a continued recovery in domestic passenger traffic.
From November 1 to date, SpiceJet is up 50.30% while InterGlobe Aviation Ltd is up 28.75%. At 11.30 a.m. M., SpiceJet traded at ₹75 on BSE, up 13% from its previous close, while Indigo fell 1% to ₹1,685.
Indian airlines carried 5.27 million passengers in October compared to 3.94 million in September.
The Boeing 737Max jets, which have been on the ground since March 2019, are scheduled to return to the skies with the US aviation regulator, Federal Aviation Administration (FAA), approving the ‘return to service’ on Wednesday. of the aircraft with extensive fixes.
A larger 737Max capacity (220 seats vs. 180 on 737NG) coupled with higher fuel efficiency will boost SpiceJet’s competitiveness, Edelweiss Capital said.
Hopes for an earlier-than-expected vaccine have also raised investor sentiment, assuming it can help bring life back to normal soon around the world.
Pfizer said Wednesday that its covid-19 vaccine candidate was found to be 95% effective in the final analysis of the phase 3 trial. Earlier, Moderna Inc also said its vaccine was more than 90% effective.
The key factors favoring aviation companies, according to analysts, are an expected growth outlook for the next three years, an improvement in capacity utilization in the coming months with a relaxation of lockdowns, share gains of market, steady cash flow generation and benign crude prices, cost benefit advantage over railways.
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