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Indian aviation
Sector outlook
Indian Aviation: Monthly domestic passenger growth trends
March: growth continuesDuring March 2011, domestic airline passenger volumes grew by 23%
YoY and 5% MoM to 4.8m passengers. Seat factors increased 400bps YoY
but declined 530bps MoM. Given the increase in ATF prices since October,
airlines are facing cost pressures. Fares had come under pressure in 1Q
due to seasonal softening and aggressive pricing by Air India but have
since recovered although some softening is likely later in the summer.
Whilst profitability is likely to weaken in 4QFY11, the overall demand
supply situation remains favourable. We retain O-PF on Jet Airways.
March 2011: strong pax growth and load factors
Passenger traffic volumes grew by 23% YoY to 4.8m (+5% MoM) against a base of
24% growth in Mar-11. 1QCY11 growth stood at 20.9% YoY.
Industry level load factors stood at 74.9%, well below the 80.2% in Feb but above
the 70.9% seen last March despite an 18% YoY growth in industry pax capacity.
Sequential load factor performance was poor. Jet Airways (-7.3%) and Air India (-
6.9%) saw the largest MoM declines while JetLite (-3.5%) and Kingfisher (-3.2%)
saw more modest declines.
Market shares: Indigo firmly in second place
Jet and Jet Lite have a combined market share of 25.4% and are 550bps ahead of
Kingfisher. Jet lost 0.5% market share MoM and JetLite lost 0.2%.
Kingfisher retained its position as the single largest airline with a 19.9% market
share, +0.9% MoM. Air India’s market share declined 0.9% MoM at 14.9%.
Indigo, Spice Jet and GoAir together had market share of 39.8%, +0.7% MoM with
Indigo +0.8%, GoAir +0.2% while Spice Jet was down 0.3%.
With 19.5% share, Indigo is now a firmly in the no.2 slot, 2% ahead of Jet
standalone (the no.3) and only 0.4% behind Kingfisher
On a 3 month basis, Kingfisher has seen the biggest market share gain (+1.3%)
while Air India has seen the biggest decline (-2.2%).
Fares and outlook: recovery in 1QFY12
The aggressive pricing visible in 4QFY11, which had been triggered by Air India,
seems to have abated with fares rising in April and some softening in the
competitive stance although promotional activity is still elevated.
Domestic ATF price have increased 44-48% since October and 27% YTD. This,
coupled with lower yields in the quarter will dampen profitability for 4QFY11.
However, the overall demand-supply situation remains healthy and fuel increases
are beginning to be passed on. We reiterate our O-PF stance on Jet Airways.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Indian aviation
Sector outlook
Indian Aviation: Monthly domestic passenger growth trends
March: growth continuesDuring March 2011, domestic airline passenger volumes grew by 23%
YoY and 5% MoM to 4.8m passengers. Seat factors increased 400bps YoY
but declined 530bps MoM. Given the increase in ATF prices since October,
airlines are facing cost pressures. Fares had come under pressure in 1Q
due to seasonal softening and aggressive pricing by Air India but have
since recovered although some softening is likely later in the summer.
Whilst profitability is likely to weaken in 4QFY11, the overall demand
supply situation remains favourable. We retain O-PF on Jet Airways.
March 2011: strong pax growth and load factors
Passenger traffic volumes grew by 23% YoY to 4.8m (+5% MoM) against a base of
24% growth in Mar-11. 1QCY11 growth stood at 20.9% YoY.
Industry level load factors stood at 74.9%, well below the 80.2% in Feb but above
the 70.9% seen last March despite an 18% YoY growth in industry pax capacity.
Sequential load factor performance was poor. Jet Airways (-7.3%) and Air India (-
6.9%) saw the largest MoM declines while JetLite (-3.5%) and Kingfisher (-3.2%)
saw more modest declines.
Market shares: Indigo firmly in second place
Jet and Jet Lite have a combined market share of 25.4% and are 550bps ahead of
Kingfisher. Jet lost 0.5% market share MoM and JetLite lost 0.2%.
Kingfisher retained its position as the single largest airline with a 19.9% market
share, +0.9% MoM. Air India’s market share declined 0.9% MoM at 14.9%.
Indigo, Spice Jet and GoAir together had market share of 39.8%, +0.7% MoM with
Indigo +0.8%, GoAir +0.2% while Spice Jet was down 0.3%.
With 19.5% share, Indigo is now a firmly in the no.2 slot, 2% ahead of Jet
standalone (the no.3) and only 0.4% behind Kingfisher
On a 3 month basis, Kingfisher has seen the biggest market share gain (+1.3%)
while Air India has seen the biggest decline (-2.2%).
Fares and outlook: recovery in 1QFY12
The aggressive pricing visible in 4QFY11, which had been triggered by Air India,
seems to have abated with fares rising in April and some softening in the
competitive stance although promotional activity is still elevated.
Domestic ATF price have increased 44-48% since October and 27% YTD. This,
coupled with lower yields in the quarter will dampen profitability for 4QFY11.
However, the overall demand-supply situation remains healthy and fuel increases
are beginning to be passed on. We reiterate our O-PF stance on Jet Airways.
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