Why SpiceJet’s shares are indifferent to declining global crude oil prices

Crude oil prices are game changers for aviation companies’ fortunes. That’s because fuel forms a big chunk of an airline’s operating costs. However, the recent drop in crude prices has not helped SpiceJet Ltd’s shares take off. So far in 2020, Brent Crude prices have declined by 19%. At the same time, the SpiceJet stock has fallen by 34%.

What explains?

For one, the coronavirus outbreak is expected to hit travel demand, resulting in lower passenger loads on international flights. Airlines across the board are expected to suffer owing to the outbreak and as such SpiceJet is not an exception.