IndiGo skids 6% on profit booking after Pakistan shuts airspace

IndiGo, SpiceJet shares price today

 

Shares of InterGlobe Aviation, which operates IndiGo airline, slipped up to 6 per cent on the BSE in Friday’s intra-day trade on profit booking after Pakistan on Thursday announced the closure of its airspace to Indian carriers.

 

Indigo’s international travel covers countries from Southeast Asia, the Middle East, CIS countries, and a few European destinations.

 

Meanwhile, share price of SpiceJet, a low-cost carrier airline primarily operating in India, also dipped 6 per cent to ₹ 50.25 on the BSE in intra-day trade.

 

Reasons for airline stocks price fall today

 

According to media reports, India’s leading airlines, particularly IndiGo and Air India have warned passengers of service disruptions following Pakistan closing its airspace to Indian airlines.

 

Executives from IndiGo and Air India, conducted internal meetings to devise alternative routes for their international flights that currently pass through Pakistani airspace, the Business Standard reported.

 

Impact of airspace closure on airline companies

 

The last time Pakistan closed its airspace in 2019 following the Balakot airstrikes, the bottom line of Indian airlines hit due to higher fuel expenses and operational complications.

 

Aircraft fuel expenses are the single largest expense of airline company’s total cost. Price of fuel cannot be accurately predicted because of several economic and political factors and events that govern them. The company’s operating results could be negatively impacted by any adverse movement in aircraft fuel prices.

 

Fuel cost comprises a significant percentage of the total airline cost and 15 per cent improvement in fuel consumption results in significant cost savings, IndiGo said in its FY24 annual report.

 

Past price performance of IndiGo

 

In the recent past, shares of IndiGo have outperformed the market after the company reported a strong financial performance. The stock had hit a record high of ₹ 5,646.90 on Tuesday, April 22, 2025. In the past six months, the stock has rallied 20 per cent, as compared to 0.51 per cent decline in the BSE Sensex. In the past one year, it surged 38 per cent, as against 6 per cent rise in the benchmark index.

 

Axis Securities view on IndiGo

 

Indigo has a sturdy footing in its domestic business while enjoying a ~60 per cent plus market share. While covering over 89 destinations, the company has access to key ground slots at all prime airports. Being a low-cost carrier, Indigo has become the fastest-growing airline company in the country. The company’s On-time performance (OTP) is also among the highest among Indian players. 

 

Analysts at Axis Securities expect better infrastructural spending at current key airports and further spending on building new airports at freshly recognised key micro markets. The brokerage firm in its report dated April 16, 2025 said that they also believe that benign crude prices during the ongoing geopolitical scenario will bode well the company.

 

About IndiGo

 

IndiGo is amongst the fastest growing low-cost carriers in the world. IndiGo has a simple philosophy: offer fares that are low, flights that are on time, and a courteous, hassle-free travel experience. It had a fleet of 437 aircraft and provided scheduled services to 89 domestic and 34 international destinations as of December 31, 2024.