IndiGo Shares Fall Over 4% After PM Modi Calls For Cut In Foreign Travel

Shares of InterGlobe Aviation, which operates IndiGo, declined more than 4% in early trade on Monday after Prime Minister Narendra Modi appealed to citizens to avoid non-essential foreign travel and reduce fuel consumption amid rising global energy prices.

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InterGlobe Aviation shares were trading at ₹4,339.50 at around 9:46 a.m., down ₹183.20 or 4.05% from the previous close.

The decline came amid concerns that the government’s appeal could affect discretionary travel demand, especially international leisure travel.

PM Modi Urges Fuel Conservation

Prime Minister Narendra Modi made the remarks during a public gathering at Parade Grounds in Hyderabad on Sunday.

During his speech, Modi urged people to reduce petrol and diesel consumption by increasing the use of public transport such as metro rail, buses and railways. He also encouraged carpooling and the adoption of electric vehicles.

The Prime Minister appealed to citizens to avoid non-essential foreign vacations, overseas destination weddings and discretionary gold purchases for the next year. He said reducing imports and conserving foreign exchange reserves would help India manage global economic challenges. Modi also encouraged domestic tourism and spending on locally produced goods.

Rising Crude Oil Prices Impact Aviation Sector

The pressure on the aviation industry has been consistent, owing to high costs of crude oil resulting from the U.S. and Iran standoff and the instability witnessed in the West Asia region.

The rise in crude oil prices leads to an increase in aviation turbine fuel prices. Concerns over inflation, supply chain disruptions and India’s import bill also weighed on investor sentiment.

IndiGo Revised Fuel Surcharge Earlier

Last month, IndiGo revised fuel surcharge rates after aviation turbine fuel prices increased in India.

The airline replaced its earlier flat fuel surcharge of ₹425 on domestic tickets with a distance-based pricing structure. Under the revised system, passengers now pay a surcharge ranging from ₹275 to ₹950 depending on the flight distance. IndiGo also increased fuel surcharge on international tickets during the same period.

Despite higher global fuel costs, the government and state-run oil marketing companies passed on only part of the increase in aviation fuel prices to domestic airlines.

Aviation Stocks Remain In Focus

The aviation sector is expected to remain in focus as investors monitor crude oil prices, fuel costs and demand trends in domestic and international travel markets.

Global crude oil prices have remained elevated in recent weeks due to supply concerns and geopolitical tensions in West Asia.