Shares of InterGlobe Aviation and SpiceJet surged over 4 percent on Thursday after the government allowed airlines to operate with 60 percent capacity in the domestic segment.
Both SpiceJet and IndiGo's shares rose as much as 4.5 percent on the BSE.
At 9:30 am, InterGlobe Aviation shares traded 2.66 percent higher at Rs 1,281.10 per share while SpiceJet traded 3.24 percent higher at Rs 52.50 per share on the BSE.
The domestic flight operations were allowed to resume from May 25 after a two-month shutdown and airlines were asked to operate with one-third capacity.
Gradually, the government allowed airlines to operate with 45 percent capacity and now it has been extended to 60 percent with immediate effect.
As per the order, the decision has been taken in view of the current scheduled domestic flight operations and the demand seen for air travel in the domestic market.
The daily domestic air traffic has increased to over 100,000 passengers from around 40,000 passengers in the month of May. Similarly, the number of daily flight departures have also increased to over 1,100 from around 500 in May.
This comes after the state governments started to ease restrictions and abolish quarantine norms.