Domestic passenger growth stood at c.24% YoY in Feb’18 vs c.17% growth over the last eleven months. Domestic capacity (ASK) growth stood at c.18 %, in-tandem with c.20% increase in industry fleet.
Domestic passenger growth stood at c.24% YoY in Feb’18 vs c.17% growth over the last eleven months. Domestic capacity (ASK) growth stood at c.18 %, in-tandem with c.20% increase in industry fleet. Indigo gained 0.5ppt market share to 40%, driven by record high PLF. Indigo’s domestic ASK growth was impacted in Jan/Feb (c.15% YoY) driven by aircraft grounding and zilch delivery of A320 neos during the same period. SpiceJet lost 0.7ppt market share in Feb’18, driven by low capacity addition. Industry reported a record high PLF of 91%, driven by higher PAX growth vis-à-vis capacity addition. At the current crude price of $70/bbl and INR/USD rate of 65, aviation stocks have limited upside from CMP. Sensitivity of EBITDAR and fair value for Indigo/SpiceJet are outlined in this report (exhibits 27 to 30).
Airlines carried 10.7mn domestic passengers (PAX) in Feb’18, implying a strong growth of 23.9% YoY vs c.17% growth over the last eleven months. Indigo’s domestic PAX increased 25.5% YoY to 4.3 mn in Feb’18, while SpiceJet carried 1.3mn PAX (+17.6% YoY), Jet Airways and Jet Lite carried 1.8mn PAX (13.4% YoY), and Air India carried 1.3mn PAX (7.5% YoY).
In Feb’18, domestic ASK growth increased 18.1% to 11.1bn, driven c.20% YoY growth in aircraft, partially offset by c.0.4%/0.8% YoY de-growth in distance flown per aircraft and no of seats, respectively. In the same month, Indigo’s domestic ASK increased at 15.4% YoY to 4.5bn. The growth rate was impacted driven by zilch delivery of A320 neos in Jan/Feb’18 and grounding of three neos in Feb’18.
SpiceJet’s domestic ASK increased 12.1% to 1.2bn. Jet Airways + Jet Lite’s domestic ASK increased 3.5% YoY to 1.8bn and Air India’s domestic ASK increased 9.4% YoY to 1.4bn. GoAir reported the highest ASK growth of 41.3% to 1.1mn.
Indigo’s ASK growth of 15.4% YoY, was driven by 28.6% YoY increase in fleet, partially offset by c.9.4% YoY decrease in distance flown, while SpiceJet’s 12.1% YoY growth in ASK was driven by a 21.8% YoY increase in aircraft, partially offset by 0.7% decrease in seats per aircraft and 5.5% decrease in distance flown. After a record delivery in Dec’17, Airbus failed to deliver any A320neo to Indigo or GoAir in Jan/Feb’18.