The shares of aviation stocks in India and those of aircraft manufacturer Boeing declined on Thursday after a fatal crash of a Boeing 787 Dreamliner operated by Air India left more than 200 people dead. The flight, which was bound for London from Ahmedabad, crashed shortly after take-off in what is termed the worst accident involving Boeing’s twin-aisle aircraft. The flight had 242 passengers and crew.
The shares of Indian aviation firms declined. The stock of InterGlobe Aviation, which owns IndiGo, fell by 2.7 per cent, while that of SpiceJet declined by 1.8 per cent. The shares of helicopter services firm Global Vectra Helicorp fell by 0.1 per cent, and that of chartered aircraft carrier Taal Enterprises fell by 3.05 per cent. However, the firm does not currently operate any aircraft.
Boeing, the aircraft manufacturer, experienced a sharper decline in its stock prices. The stock was down over 4.4 per cent in the US market in early trade, while that of Spirit AeroSystems and General Electric fell by 2.7 and 2.3 per cent, respectively. The crash occurs days before the Paris Air Show, the aviation industry’s flagship trade event.
Analysts attributed the decline in aviation stocks to investor jitteriness.
“Such a reaction is expected whenever a tragedy of this magnitude happens. But tactically, it does not make sense. One can still understand if Air India is listed and its stock price falls. But a decline in IndiGo and other aviation stocks is nothing more than a sentimental reaction,” said Ambareesh Baliga, an independent equity analyst.
Baliga added that the Air India crash will have a short-term impact.
“A small percentage may defer their air travel. We have seen air crashes in the past. We have seen train accidents happening, and that does not stop people from travelling by train. At the best, this correction may extend to another day.”
