SpiceJet Chairman Warns Crude at $90 Per Barrel Is 'Unsustainable' for Airlines

Ajay Singh, chairman and managing director of SpiceJet Ltd., has issued a stark warning that crude oil prices holding at $90 per barrel are no longer viable for airlines. His remarks come amid rising fuel costs that continue to erode margins across the aviation sector, particularly for low-cost carriers operating on thin profit spreads. Singh emphasized that the current energy price environment threatens operational viability, especially for airlines with high fuel consumption and limited pricing power. The reference to $90 per barrel aligns with recent trading levels of the West Texas Intermediate (CL=F) crude benchmark, which has remained above $88 for much of early 2026. With fuel typically accounting for 25% to 35% of an airline’s operating expenses, sustained prices at this level could force carriers to raise fares or cut capacity. This pressure is especially acute for India’s domestic aviation market, where SpiceJet operates as a key low-cost provider. Shares in major energy firms like Exxon Mobil (XOM) have seen modest gains in early 2026 amid strong demand signals, but Singh’s warning introduces a counterbalance: if airlines cannot absorb fuel costs, demand for jet fuel may soften. Similarly, major U.S. airlines such as Delta Air Lines (DAL) face margin compression, with fuel being a dominant cost factor in their financial statements. The statement may influence investor sentiment across both energy and transportation sectors. Market participants are now monitoring whether airlines can pass on costs or if consolidation or fleet adjustments will follow. The outlook for air travel profitability in 2026 hinges on both oil price trajectories and carrier cost-management strategies.