Shares of SpiceJet rallied as much as 14.2 percent on Friday morning to an intraday high of Rs 104.70 apiece, its highest price since July 2018. As per Bloomberg data, trading volume was around 40 times its twenty-day average for the time of the day.
Despite weak February passenger growth data released earlier this week, aviation stocks have surged. Interglobe Aviation, the parent company of IndiGo saw a 2 percent surge in morning trade while Jet Airways rose more than 3 percent.
According to the air passenger data released by Directorate General of Civil Aviation on Wednesday, domestic air passenger growth grew by 5.6 percent to 113.49 lakh, the slowest growth seen in the last 59 months.
IndiGo's passenger traffic was up by 15 percent to 49.31 lakh, Jet Airway's traffic fell by 28 percent to 12.92 lakh and SpiceJet's passenger traffic saw a 17 percent growth to 15.58 lakh.
Experts suggest that a likely consolidation in the aviation industry and the pricing power due to the cash troubles of Jet Airways could be the reason behind the rallying stock prices.
Meanwhile, a Reuters report citing sources said that SpiceJet is likely to lease some of Jet Airways' aircraft that are being grounded for failure to repay debts.