IndiGo, SpiceJet Shares Fall After ATF Prices Rise 5.46% For Second Consecutive Month
Shares of IndiGo and SpiceJet declined after Aviation Turbine Fuel prices were increased by 5.46% for the second straight month. The latest hike raised ATF prices by Rs 6.28 per litre, adding pressure on airline operating costs. Fuel expenses account for nearly 40% of airlines’ total operating costs
Shares of major domestic airlines IndiGo and SpiceJet declined on Tuesday after another increase in Aviation Turbine Fuel (ATF) prices raised concerns over higher operating expenses for carriers.
InterGlobe Aviation, which operates IndiGo, fell 2.80% to Rs 5,042, while SpiceJet shares declined 1.9% to Rs 10.12 during early trade.
Oil marketing companies increased ATF prices for domestic airlines by 5.46% on Tuesday, marking the second consecutive monthly hike. The price of aviation fuel was raised by Rs 6.28 per litre to Rs 121.28 per litre from Rs 115.
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The latest increase follows a 7.5% rise in ATF prices last month. The consecutive hikes have reversed a significant portion of the benefits from earlier reductions, with three price cuts from April 2025 lowering ATF rates by Rs 12,239.17 per kilolitre. Subsequent increases have recovered nearly three-fourths of those reductions.
Fuel remains one of the largest expenses for airlines, accounting for around 40% of their overall operating costs. Any increase in ATF prices directly impacts airline profitability and ticket pricing decisions.
Airlines face rising cost pressure
ATF rates differ across cities depending on local taxes, including value-added tax. In August, prices were revised to Rs 86,077.14 per kilolitre in Mumbai, Rs 95,512.26 per kilolitre in Chennai and Rs 95,164.90 per kilolitre in Kolkata.
State-owned fuel retailers Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise ATF and cooking gas prices on the first day of every month. The revisions are based on international benchmark fuel prices and currency movements.
The latest increase comes at a time when airlines are closely monitoring input costs amid changing global fuel markets. While aviation fuel prices have risen in recent months, domestic petrol and diesel prices remain unchanged.
Higher ATF costs could weigh on airline margins if companies are unable to offset the increase through improved operational efficiency or higher passenger yields.
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