Cost turbulence, rising competition may put pressure on airline stocks

Price hikes may plague demand, robust passenger traffic notwithstanding

ATF, Jet fuel prices

Oil-marketing companies on Thursday announced a hike in price to its highest-ever levels. Photo: Shutterstock

Ram Prasad Sahu Mumbai
Record high prices of aviation turbine fuel (ATF), a depreciating rupee, demand trends in the upcoming lean season, and competitive pressures could dent near-term prospects of listed aviation stocks - InterGlobe Aviation (IndiGo) and SpiceJet.

Both airline stocks have shed about 11 per cent each since the start of June. Given the multiple headwinds faced by the aviation sector, there could be more downsides for the two airlines.

The biggest worry for the sector though is the rise in jet fuel price, which accounted for 40 per cent of their costs in 2021-22.

Oil-marketing companies on Thursday announced a hike

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First Published: Jun 20 2022 | 6:04 AM IST

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