IndiGo, SpiceJet Shares Tumble Over 7% Amid West Asia Chaos, Travel Platforms Also Under Pressure

The West Asia conflict has hit Indian aviation. Shares of major Indian airlines, as well as online travel firms like Ixigo and Easy Trip Planners declined significantly on Monday as escalation of the Iran-Israel conflict forced the closure of Gulf airspace. It also brought operations at Dubai International Airport, one of the world's busiest transit hubs, to a near-standstill. Hundreds of flights on India-Gulf routes have been cancelled or rerouted.

IndiGo, India's largest airline, bore the brunt of investor panic. Its shares crashed as much as 7.5% during the day, hitting a low of ₹4,461 on the BSE, before recovering slightly to trade around 6% lower by early afternoon.

The airline cancelled all its flights to and from West Asia, telling passengers the move was a precautionary step. It also offered full refunds or free rescheduling for affected bookings made on or before February 28.

"In an endeavour to provide support to our customers, we are extending full flexibility and waivers for travel to/from the Middle East and select international sectors until 7 March 2026, applicable to bookings made on or before 28 February 2026. Customers may opt for a full refund or reschedule at no additional cost," the airline stated.

Similarly, SpiceJet shares dropped over 3% to ₹14.91, while the firm tumbled harder in the afternoon session as its shares fell 7% lower, after it too cancelled all flights to and from the UAE and advised passengers to check their flight status before heading to the airports.

Additionally, Air India also suspended all flights to and from the United Arab Emirates, Saudi Arabia, Israel, and Qatar through March 2. It also cancelled some flights to and from Europe on March 2.

The pain wasn't limited to airlines. Online travel platforms took a beating too. Ixigo's shares crashed 13.5% to ₹147, while Easy Trip Planners fell as much as 9% to ₹7.8.

Notably, brokerage firm JM Financial said that the escalating conflict in West Asia is bad news for IndiGo, at least in the short term.

It noted that if the disruption lasts two weeks, IndiGo could lose an estimated ₹56.5 crore in profits just from cancelled flights, that is about 3% of its quarterly earnings.

The brokerage also highlighted that since oil prices are spiking, the fuel sensitivity may amplify earnings volatility for IndiGo.

Conflict around Iran almost always pushes crude oil prices higher, and aviation fuel makes up 30-40% of an airline's operating costs. IndiGo does very little fuel hedging, meaning it has no real cushion against sudden price jumps. So, for every $5 rise in crude oil prices, IndiGo's earnings could shrink by roughly 13%, the brokerage firm noted.

However, if the conflict ends quickly, IndiGo should recover fast, bookings and operations can normalise relatively quickly once airspace reopens. But if the war drags on, the airline faces a triple hit with fewer flights, higher fuel costs, and weaker investor sentiment.