Airline stocks dip as crude prices surge

The stocks of airline operators extended their fall on Thursday as crude oil prices further strengthened in the International market. OMCs hiked ATF prices following the continued weakening of the rupee.

Geopolitical turmoil fuelled by US-Iran tension and the continued stress in the Venezuelan economy along with low US crude inventories helped raked up Brent crude oil prices to US$ 77.44 a barrel on Thursday.

In the domestic market, Indian Oil Marketing Companies (OMCs) on Wednesday hiked Aviation Turbine fuel prices for the third consecutive day. This hike is mostly due to weakening in the value of Indian Rupee.

For Q1FY19, all the three airline operators reported losses due mainly to high fuel prices, foreign exchange impact and competitive airfares. Reacting to this negative development, airline stocks closed in negative territory. Airline stocks including Spicejet Limited Rs. 78.25 per share, down by 3.75 per cent, Interglobe Aviation Limited Rs. 944.65 per share, down by 2.57 per cent and Jet Airways at Rs. 286.75 per share, 1.70 per cent on Thursday.