Since their lows in April, Aviation stocks InterGlobe Aviation (IndiGo) and SpiceJet have gained 18-32 per cent on expectations of improvement in passenger traffic and regulatory relief in the form of higher fares and expansion in capacity.
The government had increased the domestic fare by 5 per cent (at the lower band) from the start of April and further by 13-15 per cent in June. This follows an increase of 10-30 per cent in rise in the upper and lower bands in February this year. The hikes were prompted by the increase in aviation turbine fuel prices, which increased 81