Aviation, Travel Stocks Sink Up to 5% After PM Modi Urges Indians to Avoid Foreign Travel

Shares of aviation and travel-related companies fell sharply on Monday after Prime Minister Narendra Modi urged citizens to avoid unnecessary foreign travel, conserve fuel and adopt "Covid-like" cautionary measures amid the ongoing crisis in the Middle East.

Among aviation stocks, InterGlobe Aviation, the parent company of IndiGo, emerged as the biggest loser, falling around 5% to ₹4,297 apiece.

SpiceJet declined 4.72% to ₹13.33, while GMR Airports slipped 3.31% to ₹97.97 per share.

Travel and tourism-linked stocks also witnessed selling pressure. Thomas Cook India fell nearly 4%, while RateGain Travel Technologies dropped over 3.5%. Shares of Le Travenues Technology, which operates Ixigo, declined more than 3%.

PM Modi's Appeal Weighs On Sector

Speaking at a public event at Hyderabad's Parade Ground, Prime Minister Modi urged citizens to reduce non-essential foreign travel and overseas spending for at least one year in light of global uncertainty and the ongoing West Asia conflict.

The Prime Minister also appealed to citizens to conserve foreign exchange reserves, reduce fuel consumption and prefer domestic tourism over overseas vacations and destination weddings.

He encouraged greater use of metros, public transport and car-pooling to lower petrol and diesel consumption.

Modi described conserving foreign exchange during volatile global conditions as a "national responsibility" and urged citizens to adopt lifestyle changes to help India manage inflation, rising energy costs and supply chain disruptions.

The comments triggered concerns among investors that outbound travel demand could weaken if consumers delay or reduce international holidays and leisure spending.

Jet Fuel Crisis Adds Pressure

Apart from the government's appeal, aviation stocks were also hit by concerns around surging crude oil prices and rising aviation turbine fuel (ATF) costs amid the Strait of Hormuz disruption.

The global jet fuel market has come under severe pressure as oil prices remain elevated due to supply concerns linked to the Iran conflict.

Airlines globally have already started reacting to the sharp increase in fuel costs. Air India recently reduced Canada flights by 35%, citing unviable fuel economics, while IndiGo, Akasa Air and British Airways cancelled multiple flights across Delhi, Mumbai and Kolkata on May 10 amid the oil shock.

Investors also fear that rupee depreciation against the dollar could further increase operational costs for airlines, as aviation companies are heavily dependent on imported fuel and dollar-denominated expenses.

Long-term Outlook Remains Positive

Despite the near-term pressure, analysts believe India's aviation sector continues to have strong structural growth potential, supported by rising domestic air travel demand and growing airport infrastructure.

IndiGo, which commands over 60% market share in India's aviation sector, is still viewed positively by many analysts because of its scale advantages and dominant domestic positioning.

Market experts also believe the government's push towards domestic tourism could eventually benefit local travel and hospitality businesses, even if outbound international travel slows temporarily.