Aviation-linked stocks like SpiceJet, Interglobe Aviation (IndiGo), and GMR Airports saw up to 5% decline in Monday’s trading session. The fall came after rising fuel costs amid the US-Iran war and PM Modi’s appeal to citizens to rethink the growing preference for overseas weddings, holidays, and leisure travel.
IndiGo share price led the losers’ pack, falling 5.03% to ₹4,296 apiece on NSE. It was followed by GMR Airports’ share price, down 3.25%, and SpiceJet shares, declining 2%.
Why are aviation stocks falling today?
Speaking at a public event at Parade Ground in Hyderabad, PM Narendra Modi appealed to citizens to rethink the growing trend of overseas weddings, holidays, and leisure travel. He urged people to avoid foreign trips for at least a year in light of the ongoing global uncertainty.
Stressing the importance of national responsibility during difficult times, the Prime Minister encouraged citizens to focus on domestic travel and contribute to strengthening the local economy.
He further called on people to embrace a lifestyle guided by “national responsibility” to help the country tackle issues such as inflation, supply chain disruptions, and rising energy costs.
As part of his appeal, he asked Indians to cut back on overseas vacations and destination weddings abroad for at least a year, underscoring the importance of reducing pressure on the country’s foreign exchange reserves. He added that conserving foreign exchange during volatile global conditions is a patriotic step and also encouraged citizens to prefer locally manufactured products over imports whenever feasible.
On the other hand, another key reason behind the fall is the ongoing global jet fuel crisis amid rising crude oil prices, according to market experts.
“Aviation stocks are falling due to Iran-US war driving a global jet fuel crisis. Crude surged to ∼$126/barrel with the Strait of Hormuz partially blockaded, spiking ATF costs that are 35-40% of airline expenses,” said Seema Srivastava, Senior Research Analyst at SMC Global Securities.
Srivastava further noted that India’s carriers are cutting routes: Air India slashed 35% of Canada flights, citing unprofitable fuel prices, while IndiGo, Akasa Air and British Airways cancelled 28 flights at Delhi, Mumbai and Kolkata on May 10 amid the oil shock.
“Middle East airspace closures and war risk dragged IndiGo down ∼7% and Ixigo 14%. With margins squeezed, fares capped by demand, and 40% long-haul ticket hikes risking passenger drop-off, investors are exiting aviation names on near-term profitability fears,” she said.
Aviation stocks trend
SpiceJet share price has remained largely negative amid a weak market. The stock has risen over 11.57% in a month; however, it has fallen over 60% in six months.
Meanwhile, GMR Airports’ share price has remained volatile in the near term. The stock has gained 3% in a month but has descended 7.15% on a year-to-date (YTD) basis.
On the other hand, IndiGo share price has also failed to impress short-term investors as the aviation giant’s stock has fallen 5.43% in a month and over 15% YTD.
On the technical outlook, Anshul Jain, Head of Research at Lakshmishree, said that IndiGo is showing signs of structural weakness after breaking below the 20- and 50-day EMA spread with a bearish gap-down move.
Jain noted that the stock has also closed the earlier bullish gap near 4300, indicating that prior support has now weakened significantly. Price action suggests increasing supply pressure, with momentum shifting decisively in favour of bears.
“The inability to defend the EMA cluster reflects deteriorating short-term trend strength. A follow-through breakdown below 4290 would confirm continuation of the weakness and likely trigger accelerated selling toward the 4200 zone on an immediate basis. Any recovery back above the moving average band would be required to neutralise the bearish setup,” he said.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.
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