Shares of airline companies tumbled up to 6 per cent on Monday after the Directorate General of Civil Aviation (DGCA) barred the airlines to book tickets until further notice from the government. Weighed down by the development, shares of Interglobe Aviation, the parent of IndiGo, and SpiceJet fell over 6 per cent on the Bombay Stock Exchange.
The directives came after some airlines, including IndiGo, SpiceJet, GoAir as well as state-owned Air India, opened bookings on select domestic routes from May 4.
Reacting to the news, stock of Interglobe Aviation cracked 6.56 per cent to hit an intra-day low of Rs 999 against previous closing price of Rs 1069.15 on the BSE. The stock closed trade at Rs 1004.50 apiece, down 6.05 per cent, on the BSE. On the National Stock Exchange (NSE), Interglobe Aviation share ended 5.93 per cent lower at Rs 1,004.95 apiece.
In a similar trend, shares of low-cost carrier SpiceJet settled at Rs 47.70, down 1.85 per cent, on the BSE against previous day closing level of Rs 48.60. Earlier today, the stock opened higher at Rs 49.40 but slipped into negative terrain to hit an intra-day low of Rs 47.25. On the NSE, the stock ended at Rs 47.85, down 1.44 per cent.
The DGCA on Sunday issued an order asking airlines to not book tickets beyond May 3, 2020, after civil aviation minister Hardeep Singh Puri told them to do so only after the government takes a decision on restarting flight services.
"The Ministry of Civil Aviation clarifies that so far no decision has been taken to open domestic or international operations... Airlines are advised to open their bookings only after a decision in this regard has been taken by the government," Puri tweeted on Saturday.
On Sunday, the DGCA issued a circular that said, "It has been brought to notice of all concerned that no decision to commence the operation of domestic/international flights from May 4 has been taken yet. In view of this, all airlines are hereby directed to refrain from booking tickets as described... The airlines may note that they shall be given sufficient notice and time for restarting of operations."
The 21-day lockdown imposed by Prime Minister Narendra Modi to prevent the spread of the COVID-19 pandemic by ensuring social distancing was extended until May 3 last week. The first phase of the lockdown was from March 25 to April 14. The second phase began on April 15 and would end on May 3.