SpiceJet and InterGlobe Aviation (IndiGo) share prices declined on Monday underpinned by the hike in prices of aviation turbine fuel (ATF) and increasing omicron cases in the country. Shares of SpiceJet and IndiGo fell 3.37% and 3.97%, respectively, in intraday trading. SpiceJet shares fell as low as Rs 65.80 per share but recovered in afternoon deals and was trading at Rs 67.35 aunit on the BSE, while IndiGo stock price declined to Rs 1,936.10 a share and was trading at Rs 1,996.2 per share in afternoon.
Stocks suffered a setback amidst twin factors of rising fuel costs and increasing travel curbs across states due to concerns over the omicron variant. Jet fuel or ATF (aviation turbine fuel) price has been hiked by 2.75 % or Rs 2,039.63 per kilolitre in the national capital on firming international oil prices, according to a PTI report.
The increase in rates comes on back of two rounds of price cuts seen in December that reflected a drop in international oil prices during the second half of November and mid-December.
At the same time, omicron cases crossed the 1700-mark on Sunday, with total COVID-19 cases rising to 1,45, 582 in the country. States around the country started imposing restrictions over the weekend with West Bengal allowing flights from New Delhi and Mumbai only twice a week and Rajasthan imposing mandatory RT-PCR tests for travellers from abroad.
Airline sector has taken a beating due to the COVID-19 pandemic with travel coming to a standstill. Travel stocks began to see some recovery last quarter when travel began to recoup. InterGlobe Aviation, which operates India’s largest airline IndiGo, narrowed its losses at Rs 1,440.42 crore in the quarter ended September 2021 from net loss of Rs 3,179.27 crore in the June quarter. While SpiceJet reported a loss of Rs 561.70 crore in September quarter, slightly lower than loss of Rs 729.08 crore in preceding quarter.