Airline stocks take off on new civil aviation policy
Shares of SpiceJet went up by 3.51 per cent to close at Rs 66.40, InterGlobe Aviation gained 1.90 per cent to Rs 1,008 and Jet Airways rose by 0.21 per cent to Rs 561 on BSE.
Intra-day, SpiceJet gained 5.22 per cent, InterGlobe soared 4.32 per cent and Jet was up 2.91 per cent. "The Cabinet today cleared the new civil aviation policy which is expected to give a big boost to the sector in the medium term," Bonanza Portfolio Associate Fund Manager Hiren Dhakan said.
Besides, airlines will soon charge only Rs 2,500 for one hour flights and will get tax incentives for operating on unserved routes even as fliers will have to pay additional levy towards regional connectivity fund under the civil aviation policy unveiled on Wednesday.
The government has also scrapped the controversial 5/20 norm and now any domestic airline can fly overseas provided they deploy 20 planes or 20 per cent of their total capacity for domestic operations. Airlines will also get tax incentives for operating on unserved routes. There has been a high decibel debate over the continuance of 5/20 norm.