Aviation Stocks Hit 52-Week Lows As Oil Spikes To 4-Year High Due To Escalating War In West Asia
· Free Press Journal
Aviation stocks hit their 52 week lows on Monday to slide over 8 percent on the Indian bourses as the war in West Asia sent oil prices rocketing while also diminishing the hope of resumption of flights to the region.
The stocks of IndiGo and SpiceJet hit their 52 week lows during the trade.
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The stock of IndiGo, the country’s largest flight operator, declined as much as 8.3 percent. The stock was trading at around Rs 4,230, which is almost 4 percent lower than its previous close of Rs 4,404.90.
US-Iran-Israel War: ‘Very Small Price To Pay,’ Says Donald Trump As Oil Prices Surge Amid Push To Neutralise Iran’s Nuclear ProgramEarlier to it, the stock opened lower on Monday at Rs 4,139.90 to further slump to Rs 4,035.65 to hit the 52 week low mark of the day. IndiGo has a market share of over 60 percent in the Indian aviation sector.
In a similar vein, the stock of SpiceJet lost up to 8.2 percent during the trade before coming back to Rs 13.20 apiece, a discount of over 5.7 percent. The stock hit its 52 week low at Rs 12.85.
The stock of GMR Airports also fell up to 4.5 percent on Monday after opening lower than the previous close.
The stock of the leading airport operator was trading at around Rs 91.60 apiece, down over 3.5 percent.
‘To Take A Little Pressure Off’: Donald Trump On US Granting India ‘Permission’ To Accept Russian Oil | VIDEOWhile for the airlines, the West Asian war means a spike in their operating costs along with reduced flights, the conflict will lead to weak traffic at airports for operators.
Oil prices on Monday reached over $118 per barrel to hit an almost four year high. The last time oil had gone this high was during the initial days of the Russia-Ukraine war in 2022.
The price of aviation turbine fuel (ATF) is close to Rs 1 lakh per kilolitre, which is expected to rise. It is the largest component in the operating cost of airlines, which are already working on thin margins.