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Aviation
Passenger volumes to remain healthy but growth to moderate
Domestic passenger traffic is expected to surpass the 15 million
mark for the quarter on account of healthy demand. However, the
growth will moderate due to last year’s high base effect. We expect
14.1% YoY and 5.8% QoQ growth in passenger traffic during April-
June 2011. Average yield per pax remained flat during April 2011.
However, it started inching up marginally from May onwards to
offset soaring fuel prices. Overall, we expect yields to improve by
1% YoY for the quarter. As a result, our I-direct aviation universe is
expected to report revenue growth of 14.9% YoY.
Higher fuel costs to take toll on margins
Average jet fuel costs have inched up again by over 14% QoQ to |
63,086 per kilo litre and players have been unable to pass on this
burden fully onto passengers due to a fresh break-out of
competition from Air India. As a result, we expect overall I-direct
aviation universe to haven operating margin of -2.8% for the
quarter.
Jet to continue to report better operating results vs. peer group
With nearly 58% of revenue coming from international operations,
we expect Jet Airways to report marginally negative EBITDA margin
of -0.6% on account of its presence in the high margin international
segment. On the other hand, SpiceJet is expected to report a
margin of -11.8% for the quarter.
Exhibit : Company specific view
Company Remarks
Jet Airways Revenues will improve sequentially due to seasonality and marginal improvement
in pax yields. International business (~56% share) will outperform vs. the domestic
business in terms of revenue growth. EBITDA is expected to remain negative on
account of ~13% QoQ jump in fuel prices.
SpiceJet Spicejet's pax traffic is expected to improve by 14.5% YoY while yield is expected
to decline marginally by 2% YoY. With 13% QoQ jump in the fuel prices, Spicejet is
expected to report negative operating margins of -11.8% v/s -10.6% reported in the
last quarter.
KFA KFA will report better topline sequentially vs. other airlines on account of the
recovery of its grounded aircraft. Margins will get impacted sharply by soaring fuel
prices. However, interest cost saving of ~| 61 crore on account of debt
restructuring would help it in reducing its losses.
Source: Company, ICICIdirect.com Research
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Aviation
Passenger volumes to remain healthy but growth to moderate
Domestic passenger traffic is expected to surpass the 15 million
mark for the quarter on account of healthy demand. However, the
growth will moderate due to last year’s high base effect. We expect
14.1% YoY and 5.8% QoQ growth in passenger traffic during April-
June 2011. Average yield per pax remained flat during April 2011.
However, it started inching up marginally from May onwards to
offset soaring fuel prices. Overall, we expect yields to improve by
1% YoY for the quarter. As a result, our I-direct aviation universe is
expected to report revenue growth of 14.9% YoY.
Higher fuel costs to take toll on margins
Average jet fuel costs have inched up again by over 14% QoQ to |
63,086 per kilo litre and players have been unable to pass on this
burden fully onto passengers due to a fresh break-out of
competition from Air India. As a result, we expect overall I-direct
aviation universe to haven operating margin of -2.8% for the
quarter.
Jet to continue to report better operating results vs. peer group
With nearly 58% of revenue coming from international operations,
we expect Jet Airways to report marginally negative EBITDA margin
of -0.6% on account of its presence in the high margin international
segment. On the other hand, SpiceJet is expected to report a
margin of -11.8% for the quarter.
Exhibit : Company specific view
Company Remarks
Jet Airways Revenues will improve sequentially due to seasonality and marginal improvement
in pax yields. International business (~56% share) will outperform vs. the domestic
business in terms of revenue growth. EBITDA is expected to remain negative on
account of ~13% QoQ jump in fuel prices.
SpiceJet Spicejet's pax traffic is expected to improve by 14.5% YoY while yield is expected
to decline marginally by 2% YoY. With 13% QoQ jump in the fuel prices, Spicejet is
expected to report negative operating margins of -11.8% v/s -10.6% reported in the
last quarter.
KFA KFA will report better topline sequentially vs. other airlines on account of the
recovery of its grounded aircraft. Margins will get impacted sharply by soaring fuel
prices. However, interest cost saving of ~| 61 crore on account of debt
restructuring would help it in reducing its losses.
Source: Company, ICICIdirect.com Research
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