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Rising crude oil prices increase turbulence for airline stocks

Cost headwinds come amid improved Q3 showing, rising yields

Higher crude oil prices will also translate into higher input prices for consumer goods companies.
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Ram Prasad Sahu
For a sector having posted net profit after a gap of eight quarters, the cheer may be short-lived. Cost pressures as a consequence of a rise in crude oil prices and higher competition could offset the positives from yield improvement and growth revival expectations.

The stock price movement of the country’s largest airline, InterGlobe Aviation (IndiGo), in recent weeks reflects the same. A strong showing in the December quarter and an improvement in passenger traffic led to a 22 per cent surge in its stock price since the start of February, before shedding a third of it in the last five

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First Published: Feb 20 2022 | 10:21 PM IST

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