But oil prices have forced airlines to raise fares at the same time that inflation and higher gas prices are eating into fliers’ wallets. Some passengers are going back to rail travel as prices rise. In June, domestic airline passenger numbers fell by 4 percent compared with the same month a year earlier, the first drop in three years, according to India’s aviation ministry.
Whether or not oil prices are in a bubble, the influence of financial investors to calm markets is debatable as prices traded above $146 a barrel this week before retreating slightly. Many oil analysts and economists predict that prices will continue to climb because of rising demand from emerging markets, while a handful contend that a rush of investment cash is artificially inflating prices.
Opinions in the market are sharply divided. In May, the Goldman Sachs oil analyst Arjun N. Murti said oil might hit $200 a barrel in the next two years, while economists at other banks, like Lehman Brothers, are predicting that prices will drop.
On Tuesday, oil prices fell sharply, closing down $6.44 a barrel, in trading on the New York Mercantile Exchange.
Mr. Ross cited several factors as signs that prices are artificially high, including the lack of lines at gasoline stations, falling consumption in the United States and steady but low worldwide growth in oil demand that he says will fall as subsidies collapse. “I just don’t see this as a long-term phenomenon,” he said of the elevated prices.
Mr. Ross has made his reputation on contrarian calls. For example, he bought into the steel industry in the United States when almost no investor would touch it. He sold his consolidated steel company for $4.5 billion, about twice what he paid for the assets. He also snapped up a Japanese bank when it was saddled with bad loans in 2000 and sold it for a profit. Recently, Mr. Ross has been looking at financial companies in the United States and paid $1 billion in March for a stake in a bond insurance company.
The airline industry is in the midst of a merger boom, as deep-pocketed carriers buy weaker rivals. The India market has had too many players, Mr. Ross said, and further consolidation is coming. “That will be constructive for the industry and for SpiceJet,” he said.