Airline stocks soar
With Go First airline filing for bankruptcy, two of the listed airline stocks – Indigo and Spicejet are having a field day! Indigo, which had closed yesterday at Rs.2070, went on to rise over 8% to hit a new 52-week high at Rs.2235.95. Spicejet, on the other hand, is among the top five gainers on the BSE, up more than 5.5% at Rs.33.25.
Go First yesterday evening filed for bankruptcy, blaming it on the “enormous damage caused by Pratt & Whitney’s defective and failing engines" and not adhering to the arbitration award.
With one more airline going down, it means there will be more business for the existing and surviving airlines and that is what the market is celebrating. Go First might limp back to services during the latter half of the year if and only if, its able to amicably resolve the issues with Pratt & Whitney’s.
Spicejet, wanting to make the most of the opportunity, announced that it be reviving 25 of its grounded aircrafts, for which it is planning to borrow close to Rs.400 crore. The funds for the revival will be drawn from the government’s Emergency Credit Line Guarantee Scheme (ECLGS) and better cash accruals.
The company said that it has already mobilised around Rs 400 crore towards getting its grounded fleet back in the air.