Airline Stocks Might Be Puzzling Investors Right Now

Republished By Plato

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Airline

The travel and tourism industry is bound to take a hit once the spread of COVID-19 intensifies further. Many say the third wave has already arrived or is about to take over India. Due to this, investor confidence in the airline businesses reduces significantly. The aviation sector was only trying to recover before the threat of the Omicron variant surfaced.

On Friday, the last day of the week for the stock, IndiGo closed at Rs 2165 (0.96% in the green) while SpiceJet closed at Rs 63.90 (0.08% in the red). Both IndiGo and SpiceJet are two of the major budget or low-cost airlines in the country.

Go First; another low-cost airline is expected to make its Initial Public Offering (IPO) later this year. But the airline has been delaying the IPO due to a weak outlook for the aviation sector. Investors won’t be keen on investing in an airline that is not even at the top of the charts.

Weekly Performance of the Airlines

IndiGo had a decent second week of January in the stock market while SpiceJet’s stock seemed to be struggling a bit. All the airlines in India are going to lose business in the coming months due to flight restrictions. On top of this, passengers are afraid to step onto aircraft and airports filled with hundreds and thousands of other people due to the fear of getting infected with the COVID-19 virus.

Industry Will be Affected

Due to this, not just the airline sector but the entire travel and tourism industry will be affected. Once again, hotels will find it a little hard to manage cash flow as there will be a severe fall in revenues, and it will result in people losing jobs at the end of the day. It all depends on how severe the next wave of COVID-19 is going to be in India.

Just when the aviation sector seems to be making a little recovery, something bad happens and takes away the confidence of the investors from the sector.