Airline Stocks Rally As Crude Oil Prices Fall; IndiGo, SpiceJet Gain Up To 8%

Airline stocks InterGlobe Aviation and SpiceJet rose sharply on Tuesday, March 10, after crude oil prices declined and signs emerged that the conflict involving the United States and Iran could ease, improving sentiment for aviation companies.

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Shares of InterGlobe Aviation, the parent company of IndiGo, rose as much as 5.6% to an intraday high of ₹4,475.25. SpiceJet shares surged about 7.7% to ₹14.08 during the trading session, according to National Stock Exchange data.

The gains followed a sharp decline in global crude oil prices, which is a key cost component for airline operations.

Crude Oil Prices Decline After Recent Surge

Global oil prices fell significantly in early trade on Tuesday after earlier surging to multi-year highs.

Brent crude traded nearly 6% lower at around $99 per barrel at about 9:15 a.m. IST after dropping as much as 10% during early deals, according to Reuters.

The decline followed comments by U.S. President Donald Trump indicating that the conflict involving the United States and Iran could end sooner than expected.

Oil prices had surged in the previous session amid fears of supply disruptions linked to escalating geopolitical tensions. Brent crude had risen to almost $120 per barrel, its highest since July 2022, Reuters reported.
Global Measures To Stabilise Energy Supply

The Group of Seven (G7) countries said they are prepared to take necessary measures to stabilise global energy supplies if required.

According to Reuters, the group indicated that it could release strategic oil reserves to support global markets if supply disruptions intensify.

Additionally, it was made known that the U.S. administration is considering relaxing some of the sanctions it had imposed on oil and providing naval escorts for oil tankers traveling through the Strait of Hormuz.

The Strait of Hormuz is one of the world’s most important oil shipping routes, handling a significant share of global crude exports.

Impact On Airline Stocks

Fuel expenses are one of the biggest expenses for airlines, and thus airline stocks are quite affected by the prices of crude oil in the world market.

A reduction in crude oil prices can provide relief to airline companies in terms of operating expenses and can improve the prospects of aviation stocks.

The rise in airline stocks is a result of previous operational disturbances in the region. IndiGo had suspended flights to and from several Middle East destinations after geopolitical tensions escalated following military strikes involving the United States, Israel, and Iran.

The recovery in aviation stocks reflects the market’s response to easing oil prices and expectations that geopolitical tensions affecting global energy markets may stabilise.