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Increase in airfares will result in increasing the shares of airlines

Travelling by air may now turn expensive for ordinary passengers, but the effect of increasing the upper and lower limits on fares by the government is showing a sharp jump in the shares of airlines. Flight tickets can be expensive by ten to thirty percent due to the government’s decision. But this increased the possibility of increasing the earnings of airlines companies. IndiGo and SpiceJet saw strong gains on Friday and went up by seven per cent. It is expected that in the coming days, shares of these companies can be seen to increase further.

Improvement in airlines operations will have a positive effect 

Recently, the Directorate General of Civil Aviation approved the increase in airfares by the Directorate General of Civil Aviation, due to which flights tickets can be expensive up to 30 percent. There is a possibility of an increase of ten percent in the minimum fare and another 30 percent in the maximum fare. It has been said by the government that till 31 March 2021, domestic flights will continue to operate with 80 percent capacity.

Travel bans have lifted

In fact, the long travel ban due to Corona infection has had a profound impact on the profitability of the civil aviation sector. But after giving relief on the travel ban, the aviation industry is looking for improvement. Now the possibility of an increase in fares can show an increase in the profits of airlines companies. 

Spice Jet had a loss of Rs 57 crore in the December quarter, while the company had a profit of Rs 77.9 crore in the third quarter of last year. IndiGo, the country’s largest airline, also lost Rs 620.1 crore in the December quarter. At the same time, the company had a profit of Rs 496 crore in the third quarter of last year.

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