IndiGo, SpiceJet slide up to 6% after Air India plane crash, oil price surge

Shares of InterGlobe Aviation (IndiGo) dropped nearly 6% to Rs 5,175, while SpiceJet fell 5.5% to Rs 42.16 on the BSE.

Air India Dreamliner crash triggers caution

Investor sentiment soured after an Air India Boeing 787-8 Dreamliner en route to London crashed shortly after takeoff from Ahmedabad. The aircraft, carrying 232 passengers and 10 crew members, went down in a residential area, killing all 241 onboard, according to initial reports.

While the cause of the crash is still under investigation, early visuals suggest the aircraft lost altitude moments after liftoff.

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Also Read: Why stock market is falling today? 4 key factors behind Sensex’s 1,100-point crash, Nifty below 24,650Geopolitical tensions add to pressureThe downturn in aviation stocks was further fueled by growing geopolitical instability in the Middle East. Israel launched military strikes on Iran’s capital, Tehran, in what it called a “preemptive strike” aimed at neutralising nuclear and missile threats.

Iranian state media confirmed the death of Revolutionary Guards Commander Hossein Salami, while Israeli officials claimed additional senior Iranian military and nuclear personnel were likely killed. Israel declared a state of emergency in anticipation of retaliatory attacks.

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Oil prices surge on supply concerns

The conflict also sent crude oil prices soaring on fears of supply disruptions. Brent crude futures surged as much as 10% intraday, reaching a high of $78.50 a barrel — the highest since January 27 — and were up nearly 12% for the week, marking the steepest weekly gain since 2022.

West Texas Intermediate (WTI) crude also jumped 9.45% to $74.47, after hitting an intraday high of $77.62.

“These tensions could have deep economic consequences if the conflict drags on,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Brent prices have already jumped 12%. A retaliatory move by Iran, such as blocking the Strait of Hormuz, could severely restrict global oil supply and push prices even higher.”

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With aviation fuel accounting for a major portion of operating costs for airlines, the spike in oil prices added to the sector’s woes, compounding investor concerns over profitability and operating margins.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)