Airline stocks fall up to 5% as passenger traffic growth slows

NEW DELHI: Stocks of Indian airlines plunged on Wednesday after a data showed that the number of domestic air passengers registered a slower growth of 16.53 per cent during May on account of rising fuel prices leading to increase in fares.

Shares of InterGlobe Aviation (IndiGo) plunged over 5 per cent on BSE during Wednesday's session, while Jet Airways and SpiceJet were down 1.79 per cent and 1.08 per cent, respectively.

This compared to a 214.68 points or 0.61 per cent rise in BSE Sensex at 35,501.42.


According to an Economic Times report on Tuesday, Indian carriers carried 11.9 million passengers during May, up from 10.17 million in May 2017, a Directorate General of Civil Aviation (DGCA) data showed.

Meanwhile, brokerage firm Citi has cut the target price on IndiGo to Rs 1,070 from Rs 1,240, while maintain ‘Sell’ call on the company.

Industry insiders say that lower growth in May was due to higher fares, but expect the growth trend to continue.