News India Live, Digital Desk: As the situation in the Middle East is becoming serious, there is an atmosphere of fear among investors. Shares of aviation companies have taken a dive in today’s trading session, due to which investors have lost crores of rupees.
1. How much did the shares fall?
Heavy selling pressure was seen in aviation stocks as soon as the market opened today:
SpiceJet: SpiceJet’s shares have been hit the most, which is almost 14% Till fell down. The company is already struggling with funding crunch, and now geopolitical tensions have added to the troubles.
IndiGo (InterGlobe Aviation): Shares of India’s largest airline Indigo also 5% to 8% Rolled till.
Air India (Tata Group): Although Air India is not listed, other related stocks of the Tata group have also been under pressure.
2. 3 main reasons for decline
It’s like a ‘triple kill’ for Indian airlines:
Rising prices of crude oil: Brent crude prices are skyrocketing due to the fear of stopping the oil supply in case of war. Airlines’ total expenses amount to approx. 40% share Air Turbine Fuel (ATF) is spent. Oil becoming expensive means less profit for airlines.
Route Diversion (Flight Rerouting): Due to the airspace of Iran and Israel being closed or unsafe, flights have to fly through long routes. This has increased fuel consumption and caused a huge increase in operational costs.
Flight Cancellation: Due to security reasons, flights to many cities in the Middle East (such as Tel Aviv, Tehran, Beirut) have had to be canceled, resulting in direct loss of revenue.
3. Expert opinion for investors
Market experts believe that unless tensions in the Middle East ease, aviation stocks will remain bullish. Volatility Will remain.
Long-term View: Long-term investors should adopt a ‘wait and watch’ policy for now.
Impact on Fares: International and domestic air fares will increase in the coming days 10% to 15% There may be an increase of Rs. 10,000, because airlines may pass the burden of increased fuel expenses on to passengers.
condition of global markets
Not only India, but aviation stocks of America and Europe are also trading in the red. The surge in gold prices and the rise in oil prices have issued a ‘red flag’ for the global economy.
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