Commodities
Crude Oil Surge and ATF Price Hike Slam Airlines IndiGo and SpiceJet
Airlines IndiGo and SpiceJet continued to feel the pinch of rising global crude oil prices on Wednesday, as Brent crude surged around 1% to $95.60 a barrel amidst escalating tensions between the US and Iran.
This led to concerns about further pressure on airline operating costs, with fuel expenses accounting for nearly 40% of total expenditure for carriers.
The latest blow came in the form of a 5.46% increase in domestic ATF prices announced on Tuesday, which pushed the price up to ₹121.28 per litre from ₹115 per litre.
The sharp rise has airline shares in focus, with InterGlobe Aviation, the parent company of IndiGo, trading lower on the NSE, and SpiceJet's stock declining almost 4% to ₹9.60 on the BSE.