Airline stocks: IndiGo, SpiceJet shares continue to decline for second straight session; everything investors should know

The fall in stocks comes despite the government reducing the windfall gains tax marginally on ATF for the next fortnight. The rate of special additional excise duty (SAED) on export of aviation turbine fuel (ATF) has been set at ₹19 per litre, compared to ₹19.5 per litre earlier.

Amid escalating tensions in West Asia, the government had imposed an export duty on diesel and ATF on March 27 and revised the rate every fortnight.

This week, the ATF prices were increased by 5.46%, in line with a rise in their international benchmarks. The price of jet fuel or ATF has been raised by ₹6.28 per litre, or 5.46%, to ₹121.28 per litre for domestic airlines, according to state-owned oil firms.

The increase comes on the back of a ₹5 a litre rise in rates on August 1. The two increases will add to the financial burden of airlines, for whom ATF makes up to 40% of operating costs.

ATF prices are generally revised on the first of every month based on benchmark international prices and foreign exchange rates.

While ATF prices for domestic and international routes were unchanged during April-June 2026 owing to the absence of revisions by oil marketing companies (OMCs), fuel costs remain elevated relative to the previous year.

ATF prices for domestic routes in August 2026 have increased by around 20% on a year-on-year (YoY) basis, following the ₹5,000 per kilolitre hike announced by OMCs, which is likely to exert additional cost pressure on airlines.

On Wednesday, the global crude oil prices surged above $95 per barrel (bbl) amid recent escalations between the United States and Iran in West Asia. This also made investors turn cautious for the sector.

Here’s how the stocks are faring

Opening at ₹4,957 apiece, shares of IndiGo declined nearly 3% to an intraday low of ₹4,908.50 apiece on Wednesday. At 12:02 PM, the airline stock was down 2.41% to ₹4,930 per share on the National Stock Exchange.

SpiceJet shares, after opening at ₹10 apiece on BSE, have lost 4% to today's low of ₹9.6. At the time of writing the article, the stock was seen at ₹9.8 per share, falling 1.9%.

Since the beginning of the year, IndiGo's shares have slipped nearly 4%, and its market capitalisation stands at ₹1.9 lakh crore.

Meanwhile, SpiceJet, with a market capitalisation of ₹1,486.42 crore, has tanked 67% so far since the beginning of 2026.