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AVIATION
Current view
q Aviation industry has had a dream year with most of the airline operators
showing marked improvement in their operations. Passenger traffic growth
remained almost flat between 2007 -2009 due to slowdown in the economy.
However it grew by 19% in 2010 and is expected to remain strong in 2011.
q Earnings for the airline players have improved in the past one year on 2 counts -
1.improved load factor (which is a function of demand-supply situation) and
2.moderation in ATF price. Load factors have seen a significant improvement on
the back of robust growth in passenger traffic and simultaneous calibrated
increase in capacity. ATF prices on the other hand had been under manageable
levels for the major part of 2010. However the current rise in crude oil prices
(crude oil hovering near the $90/barrel mark) has made the aviation industry a
bit wary.
q Earlier attempts by the aviation industry towards bringing the ATF under the
declared goods status have failed on numerous counts and we do not see any
strong reason this time around for the acceptance of their above mentioned
demand. We do not expect any major positive announcement for the aviation
industry in the forthcoming budget. We therefore believe that the budget will
be neutral for the aviation sector.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
AVIATION
Current view
q Aviation industry has had a dream year with most of the airline operators
showing marked improvement in their operations. Passenger traffic growth
remained almost flat between 2007 -2009 due to slowdown in the economy.
However it grew by 19% in 2010 and is expected to remain strong in 2011.
q Earnings for the airline players have improved in the past one year on 2 counts -
1.improved load factor (which is a function of demand-supply situation) and
2.moderation in ATF price. Load factors have seen a significant improvement on
the back of robust growth in passenger traffic and simultaneous calibrated
increase in capacity. ATF prices on the other hand had been under manageable
levels for the major part of 2010. However the current rise in crude oil prices
(crude oil hovering near the $90/barrel mark) has made the aviation industry a
bit wary.
q Earlier attempts by the aviation industry towards bringing the ATF under the
declared goods status have failed on numerous counts and we do not see any
strong reason this time around for the acceptance of their above mentioned
demand. We do not expect any major positive announcement for the aviation
industry in the forthcoming budget. We therefore believe that the budget will
be neutral for the aviation sector.
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