Aviation stocks may lose altitude over ATF prices, traffic seasonality

International routes and supply shortages are, however, positive for IndiGo

Rising crude oil prices and muted passenger traffic in the July-September quarter (second quarter, or Q2) of 2023-24 (FY24) have raised concerns about the profitability of listed aviation players. These two concerns have caused the stock of InterGlobe Aviation (IndiGo), the largest player in the sector, to slip by 11 per cent since its highs at the end of July.
 

Nuvama Research expects yields to cool down in the near term due to seasonality, rising crude oil prices, and higher capacity.

Brent crude prices have risen by 18 per cent since the start of July and are expected to push