IndiGo Share Price Drops Over 5% Amid Air India Crash, Crude Oil Spike

On June 13, 2025, IndiGo’s parent company, InterGlobal Aviation, saw a sharp 5 to 6% plunge in its share price, dropping around ₹5,445 to a low near ₹5,175 on the BSE/NSE. This tumble came amid a double whammy: a tragic crash of an Air India Dreamliner and a surge in global crude oil prices caused by Middle East tensions.

The Air India Disaster: A Catalyst for Panic

On June 12, an Air India Boeing 787-8 (flight AI-171), bound for London from Ahmedabad, crashed shortly after takeoff, tragically killing 241 of the 242 passengers onboard. The calamity:

• Shattered investor confidence, given its severity and ties to aircraft safety. 
• Prompted government safety reviews: The Ministry of Civil Aviation is currently assessing the Boeing 787 fleet, considering the possible grounding of operations.
• Deployed Airlines, including IndiGo, to issue travel advisories and report minor operational disruptions or airport rescheduling, especially at Ahmedabad.

Crude Oil Surge Intensifies Pressure

Simultaneously, Brent crude surged over 10-30%, rising approximately $75–78 per barrel, its sharpest spike in years. The escalation was tied to conflict in the Middle East, especially Israeli airstrikes on Iran, which amplified fuel cost concerns for airlines.

Because fuel constitutes roughly 30–35% of airline expenses, the sudden surge squeezed profit margins and drove stocks lower.

Market Reaction: Flight of Investor Funds

Combined, the crash and oil spike triggered a broader sell-off:

• IndiGo shares fell nearly 5.6–5.8%, reaching intra‑day lows of ₹5,175.
• SpiceJet followed suit, shedding about 5–6%, consistent with sector‑wide weakness.
• Overall, the Sensex dropped over 1,300 points, and the Nifty lost around 250–284 points as investors ran from aviation and other oil‑sensitive stocks  

Market watchers point out that geopolitical instability near the Strait of Hormuz, a key oil transit chokepoint, could exacerbate supply disruptions and maintain upward pressure on fuel costs. 

What Investors Should Know

• Safety concerns: Although the cause of the crash remains under investigation, authorities are now considering grounding Boeing 787-8 jets temporarily.
• Margin risks: As crude heads toward $80 per barrel, aviation companies face rising input costs, fuel hedges may help, but not enough to fully shield profitability.
• Technical outlook: Some analysts suggest that IndiGo shares are undergoing a “healthy retest” of the ₹5,035 support zone, offering potential buy‑on‑dip opportunities if global tensions ease.

Broader Implications for the Aviation Sector

• Sentiment: Investor risk appetite for aviation remains fragile. The crash has raised questions about aircraft maintenance, operational safety, and government oversight.
• Competition dynamics: While Air India is undergoing fleet modernization under the Tata Group, rival IndiGo operates newer aircraft, highlighting a competitive contrast.

Final Thoughts

IndiGo’s price falls from twin shocks in more than 5% of the share price: Air India Dreamliner Crash, which fulfilled the fear of security, and increased the price of a steep crude oil operated by increasing the tension in the Middle East. Together, these forces rattled confidence and squeezed margins in the aviation sector. For Investors, it’s crucial to monitor developments in the crash investigation, crude price trends, and broader geopolitical dynamics. Any unexpected turn could trigger further volatility or a suitable re-entry point.

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