After the government announced that India will restart scheduled international commercial flights on March 27 after a two-year break, shares of aviation companies soared in the early trading on Wednesday.
On the National Stock Exchange (NSE), InterGlobe Aviation, which operates IndiGo, jumped 8.02 percent to Rs 1,727.00 per share, while on the BSE, it rose 7.90 percent to Rs 1,726.45.
India will restart scheduled international commercial flights on March 27 after a two-year hiatus, the Ministry of Civil Aviation said on Tuesday. While regular international flight services have been discontinued owing to the pandemic since March 2020, special flights have been running between India and 37 countries under air bubble arrangements since July 2020.
Oil prices have risen throughout the world as a result of the ongoing conflict between Ukraine and Russia, causing a shortage of oil goods such as jet fuel. Jet fuel rates in India were raised for the seventh time this month. According to analysts, rising aviation turbine fuel costs (ATF) are dimming the airline sector's prospects and would eat into airline income.
Because fuel prices account for around 40% of an airline's expenditures, increased costs (such as fuel prices) will reduce profits.