Airlines Slash Flights as Fuel Costs Soar — Five Stocks Quietly Winning
Air India is cutting 22% of its domestic flights. IndiGo — India's largest airline by market share — is trimming 5–7% of domestic routes and a steep 17% of international capacity. The trigger: aviation turbine fuel (ATF) prices that have surged alongside crude oil, driven by the West Asia conflict and uncertainty around the Strait of Hormuz.
For airline investors, the math is punishing. Per IndiGo's Q2 FY26 earnings call, more than 60% of the airline's total expenses — fuel, maintenance, aircraft leases — are directly or indirectly dollar-denominated. That represents roughly $10 billion in foreign currency exposure. IndiGo's FY25 profit of ₹88.7 billion was achieved in what management called a "benign fuel environment," with fuel CASK (cost per available seat kilometer) declining 6.6% year-over-year in Q4 FY25. That tailwind is now reversing hard.
But here's the twist: the same forces crushing airline margins are creating tailwinds for companies across oil, railways, and refining. Here are five that stand to gain.
1. Oil India (OIL) — The Direct Beneficiary
When crude prices rise, upstream oil producers earn more per barrel. Oil India, the country's second-largest national oil explorer, is a pure play on this dynamic.
Per their FY25 earnings call, Oil India delivered standalone revenue of ₹23,987 crore, EBITDA of ₹10,636 crore, and profit after tax of ₹6,114 crore — a 10% growth in PAT. The company produced 3.46 MMT of crude and 3.25 MMTOE of gas, while maintaining a dividend payout of 115% per share, fueled by an EPS of ₹37.59. India's crude import dependence sits at 85–88%, per PPAC data cited in multiple filings. Every spike in global crude prices directly improves Oil India's realizations on domestic production.
2. Deep Industries (DEEPINDS) — Riding the Upstream Supercycle
Rising crude prices do more than boost producers — they accelerate drilling activity. Deep Industries, an oilfield services company, is riding this wave.
In 9M FY26, Deep Industries posted revenue of ₹642 crore (up 57% year-over-year), EBITDA of ₹318 crore (up 58%), with an EBITDA margin of 46.3%, per their Q3 FY26 investor presentation. PAT grew 59.7% year-over-year.
Asian Energy Services, a peer in the oilfield services space, framed the opportunity in their May 2026 earnings call: "The single biggest macro development for our industry has been the West Asia conflict… energy security has become an increasingly critical national priority." India has committed $100 billion in oil and gas investment by 2030 — a multi-year pipeline of onshore drilling, workover, and field development activity that benefits service providers like Deep Industries regardless of short-term crude swings.
3. IRCTC — The Railway Monopoly Gets a Passenger Boost
When airlines cut flights and fares rise, passengers shift to trains. IRCTC — India's monopoly platform for online rail ticketing — is the natural beneficiary.
Per their Q2 FY26 earnings call, IRCTC reported revenue of ₹1,146 crore (up 7.71% YoY), EBITDA of ₹404 crore (up 8.31%), and an EBITDA margin of 35.25%. Profit after tax hit ₹342 crore, an 11% year-over-year increase. Indian Railways carried approximately 7.15 billion passengers in FY25, a 5% increase over the prior year, per Ixigo's annual report. With the government allocating a record ₹2.65 lakh crore in capital outlay for railways in FY26, capacity is expanding to absorb exactly the kind of modal shift that airline flight cuts accelerate.
4. Ixigo (IXIGO) — The Rail-Heavy Travel Platform
Unlike larger OTAs that skew toward air travel, Ixigo has built its business around train and bus bookings. When flights become scarce and expensive, Ixigo's core segment gets a boost.
In Q3 FY25, Ixigo reported revenue from operations of ₹241.8 crore — up 42% year-over-year — per their earnings call transcript. Train GTV (gross transaction value) grew 27% YoY despite Indian Railways cutting the advance reservation period from 120 to 60 days, a one-time headwind. Bus GTV surged 63% in the same quarter. Ixigo's own annual report acknowledges that "fluctuations in fuel prices" affect travel demand — but for a platform where rail and bus dominate, expensive flights are a tailwind, not a headwind.
5. Reliance Industries (RELIANCE) — When ATF Cracks Spike, Refiners Win
Reliance operates India's largest private refining complex. When geopolitical disruptions widen the spread between crude oil and refined products like jet fuel — known as "cracks" — refining margins expand.
Per Reliance's Q3 FY26 investor presentation, ATF cracks hit $24.6 per barrel, up 66% year-over-year. Gasoil cracks reached $24.5/bbl, up 62%. The presentation noted that domestic ATF demand rose 2.6%, driven by "healthy air travel in both domestic and international sectors, constrained by flight cancellations." In their Q2 FY25 earnings call, management confirmed: "EBITDA improved because of higher fuel cracks… driven by geopolitical tensions and concerns over supply."
The current environment — elevated crude with supply disruptions — is precisely when integrated refiners with complex configurations earn their best margins.
What Retail Investors Should Do
Don't rush to short airline stocks or pile into upstream plays without understanding the duration of this catalyst. West Asia tensions could ease if ceasefire negotiations progress — yesterday's Iran ceasefire reports already sent Sensex surging 2,775 points.
The more durable structural plays are in energy security and rail infrastructure. India's $100 billion commitment to domestic oil exploration isn't going away regardless of short-term crude swings. And the modal shift toward railways — supported by record government capex — is a multi-year trend, not a one-quarter trade.
If you hold airline stocks, watch IndiGo's next quarterly earnings closely for the fuel CASK reversal. If you're looking for second-order beneficiaries, the five names above have the filing evidence to back up the thesis.
Data sourced from company filings on NSE via Xaro.