IndiGo, SpiceJet Shares Fall Up To 3% As Crude Oil Nears $96

IndiGo and SpiceJet remained under pressure on Wednesday, following up on the decline seen in the previous session. Rising crude oil prices and a fresh increase in Aviation Turbine Fuel (ATF) prices have weighed on investor sentiment towards the sector.

IndiGo, SpiceJet Shares Extend Losing Streak

InterGlobe Aviation, the parent company of IndiGo, was trading at ₹4,925 on the National Stock Exchange (NSE) at 10:07 am, down 2.52%. SpiceJet shares were trading at ₹9.69 on the Bombay Stock Exchange (BSE), lower by 3%.

Both stocks had also declined sharply in the previous session following the ATF price revision. IndiGo fell 3.48% to ₹5,052, while SpiceJet declined 3.20% to ₹9.99 on Tuesday.

The latest declines extend the airlines' losing streak as investors assess the potential impact of higher fuel costs on operating margins.

Crude Oil Moves Towards $96

Brent crude rose 1% to $95.60 a barrel on Wednesday, putting the benchmark on course for its fourth gain in five sessions.

The latest move higher came amid escalating fighting between the US and Iran, raising concerns about potential disruptions to energy flows through the Strait of Hormuz, a critical route for global oil supplies.

For airlines, a sustained increase in crude prices can translate into higher fuel expenses and weaker profitability.

ATF Prices Rise For Second Straight Month

Domestic ATF prices were increased by 5.46% on Tuesday, marking the second consecutive monthly increase.

Why Fuel Costs Matter For Airlines

Fuel is one of the largest operating expenses for airlines, accounting for nearly 40% of total operating costs. Any sustained increase in jet fuel prices can therefore put pressure on airline margins.

Key factors to watch:

• Further moves in crude oil prices

• Any revisions to ATF prices going forward

• How much of the higher fuel cost airlines can pass on to passengers

• How long geopolitical tensions continue to disrupt oil supply routes

Crude is now nearing $96 a barrel. Domestic ATF prices have also risen for a second month. That leaves airline profitability closely linked to where energy prices go next.

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