Crude Oil Surge Crushes Aviation Stocks

The global crude oil surge has sent shockwaves through the aviation sector, causing stocks of IndiGo and SpiceJet to plummet. The parent company of IndiGo, InterGlobe Aviation, saw its shares decline on the NSE, while those of SpiceJet fell on the BSE.

The Indigo stock dropped over 3 percent to Rs 5,055, with SpiceJet's shares declining almost 4% to Rs 9.60. This weakness is largely attributed to Brent crude prices surging around 1% to $95.60 a barrel due to escalating tensions between the US and Iran.

The increase in crude prices has raised concerns about further pressure on airline operating costs, as fuel expenses account for nearly 40% of total expenditure for carriers. If jet fuel prices continue to rise, it could affect profitability, particularly if airlines are unable to pass on higher costs through ticket prices.