IndiGo, SpiceJet shares: Aviation stocks crash up to 9% over US-Iran war; what lies ahead
Aviation counters took a major hit on Monday as shares of InterGlobe Aviation and SpiceJet tumbled as much as 9 per cent during the trading session, before making a partial recovery.
- Mar 2, 2026,
- Updated Mar 2, 2026 12:38 PM IST
Aviation counters took a major hit on Monday as shares of InterGlobe Aviation Ltd and SpiceJet Ltd tumbled as much as 9 per cent during the trading session, before making a partial recovery. Aviation companies shall face the double whammy of the geopolitical concerns in the Middle East.
The conflict between the US, Israel and Iran has resulted in multiple airspace closures in West Asia, massively disrupting flight operations. Adding to this, the rising crude oil prices shall increase the fuel costs, adding to the rising operational expenses, denting margins.
Amid the weakness in the broader markets, shares of SpiceJet cracked more than 9.20 per cent to Rs 14.60, with its market capitalization slipping below Rs 2,250 crore. The stock has cracked 75 per cent from its 52-week high at Rs 56.80 hit on April 28, 2025. The stock is down nearly 55 per cent in 2026 so far.
Similarly, shares of InterGlobe Aviation, the parent company of budget carrier IndiGo, dropped over 7.50 per cent to Rs 4,460.90 on Monday. However, the stock was seen at 4,595.80, down 4.71 per cent as of 12.10 pm. The stock has fallen more than 26 per cent from its 52-week high at Rs 6,225.05, hit in August 2025.
Escalation of conflict in the Middle East presents a near-term negative for IndiGo, driven by disruption to Gulf airspace and potential operational constraints at Dubai - a critical global transit hub - which could temporarily reduce international ASKs, depress connectivity traffic, and lower aircraft utilization, said JM Financial.
"Concurrently, a geopolitical spike in crude oil prices poses margin risk given IndiGo’s high fuel cost sensitivity and limited hedging. For every $5 increase in Brent price, Indigo’s earnings are expected to contract by 13 per cent as per our calculation, assuming rupee to be constant," it added.
Market experts believe that a swift de-escalation may normalize operations and bookings normalize quickly, but a prolonged disruption risks capacity rationalization, margin compression, and estimated downgrades. Experts view the situation tactically negative in the immediate term, with the duration of airspace restrictions and crude price trajectory remaining variables for stock direction.
If the disruption persists for a fortnight, the estimated ASK loss stands at Rs 130 crore, which accounts for a PBT loss of Rs 56.5 crore, accounting for 3 per cent and 1.4 per cent of PBT for 4QFY26 and FY26 respectively. While IndiGo’s structural strengths position it well to absorb temporary shocks, the Middle East disruption introduces a clear near-term earnings and sentiment overhang via international capacity disruption and fuel cost volatility, JM adds.
Normalization of operations at Indigo supported domestic air traffic on January 26, while daily trends in February 2026 point to moderate growth. Indigo regained its market share, while other airlines saw a sequential decline. Operational metrics improved, with better OTP and lower cancellations, said Emkay Global Financial Services.
"However, escalating geopolitical tensions in the Middle East are disrupting international operations and would push crude oil prices higher, weighing on airline profitability. Indigo’s PLF declined by 40 bps MoM to 87.7 per cent. OTP (on-time performance) improved sequentially across key airlines. With operations normalizing, Indigo topped the punctuality chart," it added.
Aviation counters took a major hit on Monday as shares of InterGlobe Aviation Ltd and SpiceJet Ltd tumbled as much as 9 per cent during the trading session, before making a partial recovery. Aviation companies shall face the double whammy of the geopolitical concerns in the Middle East.
The conflict between the US, Israel and Iran has resulted in multiple airspace closures in West Asia, massively disrupting flight operations. Adding to this, the rising crude oil prices shall increase the fuel costs, adding to the rising operational expenses, denting margins.
Amid the weakness in the broader markets, shares of SpiceJet cracked more than 9.20 per cent to Rs 14.60, with its market capitalization slipping below Rs 2,250 crore. The stock has cracked 75 per cent from its 52-week high at Rs 56.80 hit on April 28, 2025. The stock is down nearly 55 per cent in 2026 so far.
Similarly, shares of InterGlobe Aviation, the parent company of budget carrier IndiGo, dropped over 7.50 per cent to Rs 4,460.90 on Monday. However, the stock was seen at 4,595.80, down 4.71 per cent as of 12.10 pm. The stock has fallen more than 26 per cent from its 52-week high at Rs 6,225.05, hit in August 2025.
Escalation of conflict in the Middle East presents a near-term negative for IndiGo, driven by disruption to Gulf airspace and potential operational constraints at Dubai - a critical global transit hub - which could temporarily reduce international ASKs, depress connectivity traffic, and lower aircraft utilization, said JM Financial.
"Concurrently, a geopolitical spike in crude oil prices poses margin risk given IndiGo’s high fuel cost sensitivity and limited hedging. For every $5 increase in Brent price, Indigo’s earnings are expected to contract by 13 per cent as per our calculation, assuming rupee to be constant," it added.
Market experts believe that a swift de-escalation may normalize operations and bookings normalize quickly, but a prolonged disruption risks capacity rationalization, margin compression, and estimated downgrades. Experts view the situation tactically negative in the immediate term, with the duration of airspace restrictions and crude price trajectory remaining variables for stock direction.
If the disruption persists for a fortnight, the estimated ASK loss stands at Rs 130 crore, which accounts for a PBT loss of Rs 56.5 crore, accounting for 3 per cent and 1.4 per cent of PBT for 4QFY26 and FY26 respectively. While IndiGo’s structural strengths position it well to absorb temporary shocks, the Middle East disruption introduces a clear near-term earnings and sentiment overhang via international capacity disruption and fuel cost volatility, JM adds.
Normalization of operations at Indigo supported domestic air traffic on January 26, while daily trends in February 2026 point to moderate growth. Indigo regained its market share, while other airlines saw a sequential decline. Operational metrics improved, with better OTP and lower cancellations, said Emkay Global Financial Services.
"However, escalating geopolitical tensions in the Middle East are disrupting international operations and would push crude oil prices higher, weighing on airline profitability. Indigo’s PLF declined by 40 bps MoM to 87.7 per cent. OTP (on-time performance) improved sequentially across key airlines. With operations normalizing, Indigo topped the punctuality chart," it added.