IndiGo Shares Decline 3% Amid Crude Oil Price Surge and Airbus Delivery Issues

IndiGo's Stock Takes a Hit Amid Rising Oil Prices and Airbus Delivery Delays

Shares of InterGlobe Aviation, the parent company of IndiGo, declined nearly 3 percent in early trade on Monday, weighed down by a sharp rise in crude oil prices and concerns over delayed aircraft deliveries from Airbus.

The stock was trading at Rs 4,351 on the NSE, down Rs 127.50, or 2.85 percent. Investor sentiment was impacted by a surge in global oil prices following Israel's reported strikes on military targets in Iran in response to missile attacks by the Islamic Republic. As a result, Brent crude jumped as much as 4.4 percent to $97.15 per barrel, while WTI crude briefly crossed $94 per barrel before paring some gains.

Higher fuel costs are generally seen as negative for airlines, as aviation turbine fuel accounts for a significant portion of operating expenses. The stock also came under pressure after a June 5 Bloomberg report stated that Airbus SE is facing delays in delivering A321XLR aircraft to IndiGo. The airline was expected to receive nine XLR jets by the end of 2026, but deliveries of some aircraft have reportedly been pushed back by several months due to supply-chain disruptions linked to the ongoing conflict in the Middle East.

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IndiGo has received two A321XLR aircraft so far and is deploying them on international routes such as Athens and Istanbul. The airline is reportedly in discussions with Airbus to secure favourable delivery slots. Adding to investor concerns, IndiGo recently announced the temporary suspension of services to six international destinations, including Hong Kong, Shanghai, Krabi, Langkawi, Ho Chi Minh City and Siem Reap, between July and September. The airline cited softer seasonal demand and a challenging cost environment for the decision.

Despite the near-term challenges, IndiGo reiterated its long-term growth ambitions. The airline is targeting 300 billion available seat kilometres (ASK) and 200 million passengers by 2030, while aiming to operate more than 550 aircraft and around 3,000 daily departures. The carrier said it remains on track to emerge as a significant global aviation player.

However, IndiGo expects capacity growth to moderate to single digits in FY27 due to capacity rationalisation. The airline anticipates a return to a stronger growth trajectory between FY28 and FY30, with capacity expected to grow at a mid-teen compound annual growth rate during the period.

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