Shares of Airlines nosedive nearly 3% on govt levy of up to Rs 8,500 on flights
Despite the marginal rise that this decision will levy will lead to on airline tickets, the shares of airline companies took a hit.
The government will impose up to Rs 8,500 levy on flights in major routes to fund the Regional Air Connectivity scheme, the Civil Aviation Secretary said according to a PTI alert.
The government will impose a levy of Rs 7,500 for flights of up to 1,000 km. For flights between 1,000-1,500 km, the levy will be Rs 8,000, according to ANI tweet.
While for flights beyond Rs 1,500 km, the levy will be Rs 8,500.
However, this will not have much impact on the air ticket prices as each flight has at least 100 seats, so a Rs 7,500 increase per flight means an additional Rs 7.5 per ticket. For flights between 1,000-1,500 km it will mean an increase of Rs 8 and for flights beyond 1,500 km it will mean an increase of Rs 8.5.
The news of this, however, resulted in the shares of IndiGo's firm InterGlobe Aviation on BSE at 1351 hours fell by 2.57% or Rs 24, at Rs 910 per piece, while SpiceJet shares fell 3.09% or Rs 2.05, at Rs 64.40 per piece.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.