Shares of InterGlobe Aviation, the parent company of IndiGo, are expected to remain in focus after reports suggested the airline may soon announce route rationalisation and operational trimming amid rising aviation fuel costs and softer travel demand.
According to ET NOW sources, IndiGo is planning a single digit reduction in operations, with any cut above 5% likely to be formally announced. The airline is reportedly witnessing pressure from weaker demand trends and rising operational costs linked to ongoing disruptions in West Asia.
Sources further indicated that the route rationalisation exercise is being driven by seasonal weakness and softer post holiday travel demand.
The latest development comes after earlier reports suggested both IndiGo and Air India are cutting domestic flights amid a sharp rise in aviation turbine fuel prices.
According to a report by The New Indian Express, IndiGo may reduce around 5% to 7% of its domestic services, while Air India is planning cuts of up to 15% between June and August.
The report noted that the airlines are responding to soaring ATF prices and moderating passenger demand after the school holiday season.
Air India reportedly informed the publication that jet fuel prices have risen from around Rs 80,000 per kilolitre to more than Rs 1 lakh per kilolitre. Fuel expenses currently account for nearly 40% of airline operating costs.
The developments come at a time when global crude oil prices remain volatile due to geopolitical tensions in West Asia, increasing cost pressures for airline operators globally.
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