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http://www.icicidirect.com/mailimages/ICICIdirect_ConsolidatedResultPreview_Q4FY12E.pdf
Aviation
ƒ Passenger volumes to decline sequentially although supply cuts by
Kingfisher Airlines (KFA) to bode well for other carriers
We expect total pax traffic to decline 4.7% QoQ to 1.57 crore in
Q4FY12E (up 9.5% YoY) on account of the lean season. Despite this lean
season, the load factor is expected to remain healthy at over 76% for
carriers like Jet and SpiceJet due to major supply cuts by Kingfisher
Airlines (KFA). With supply rationalisation in the industry, revenue per
passenger is expected to remain healthy in Q4FY12E vs. last year as
most domestic scheduled carriers hiked their fares in February-March
2012 due to flight cancellations by KFA during the same period. Going
ahead, the fourth quarter is likely to end with airfares averaging 3.6%
higher vs. last year and marginally lower (-0.4% QoQ) compared to that
of last quarter (peak season). Overall, we expect our I-direct aviation
universe to report revenue growth of 9.7% YoY, -4.4% QoQ.
ƒ Margin to still remain negative due to higher fuel prices, weak rupee
Although an improvement in load factor would help in driving yields
upwards compared to last year, a sharp increase in ATF prices and a
weak rupee is likely to weigh down on total operating expenses. This, in
turn, would have a negative impact on operating margins. Average fuel
prices have increased by 5.7% QoQ (22.4% YoY) to | 63,997 per kl while
the rupee has continued to remain above the 50 mark vs. the dollar.
Considering this, we expect the overall aviation universe to have
negative operating margin of 3.5% for the quarter.
Company specific view
Company Remarks (Q4FY12)
Jet We expect revenues to grow 16.0% sequentially on ~12% rise in pax traffic and
~5% rise in average yields. Market share is expected to improve sequentially by 60
bps due to cut-back in supply by KFA. Margins are expected to be hit by a weak
rupee. Reversal of MTM loss may positively surprise the bottomline
Spicejet SpiceJet's revenues are expected to grow by 34.4% in Q3FY11E (higher than other
airlines in our coverage) due to an increase in the capacity. However margins are
expected to remain negative due to rising fuel prices and other operating cost s due
to a weakening rupee
Kingfisher KFA is expected to report revenue de-growth of 36% QoQ due to 26% reduction in
capacity and 5% drop in average yields. Market share is likely to go down to 9.5%
from 14.2% reported in last quarter. Net loss is expected to remain elevated on
account of higher operating costs and interest costs
Source: Company, ICICIdirect.com Research
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://www.icicidirect.com/mailimages/ICICIdirect_ConsolidatedResultPreview_Q4FY12E.pdf
Aviation
ƒ Passenger volumes to decline sequentially although supply cuts by
Kingfisher Airlines (KFA) to bode well for other carriers
We expect total pax traffic to decline 4.7% QoQ to 1.57 crore in
Q4FY12E (up 9.5% YoY) on account of the lean season. Despite this lean
season, the load factor is expected to remain healthy at over 76% for
carriers like Jet and SpiceJet due to major supply cuts by Kingfisher
Airlines (KFA). With supply rationalisation in the industry, revenue per
passenger is expected to remain healthy in Q4FY12E vs. last year as
most domestic scheduled carriers hiked their fares in February-March
2012 due to flight cancellations by KFA during the same period. Going
ahead, the fourth quarter is likely to end with airfares averaging 3.6%
higher vs. last year and marginally lower (-0.4% QoQ) compared to that
of last quarter (peak season). Overall, we expect our I-direct aviation
universe to report revenue growth of 9.7% YoY, -4.4% QoQ.
ƒ Margin to still remain negative due to higher fuel prices, weak rupee
Although an improvement in load factor would help in driving yields
upwards compared to last year, a sharp increase in ATF prices and a
weak rupee is likely to weigh down on total operating expenses. This, in
turn, would have a negative impact on operating margins. Average fuel
prices have increased by 5.7% QoQ (22.4% YoY) to | 63,997 per kl while
the rupee has continued to remain above the 50 mark vs. the dollar.
Considering this, we expect the overall aviation universe to have
negative operating margin of 3.5% for the quarter.
Company specific view
Company Remarks (Q4FY12)
Jet We expect revenues to grow 16.0% sequentially on ~12% rise in pax traffic and
~5% rise in average yields. Market share is expected to improve sequentially by 60
bps due to cut-back in supply by KFA. Margins are expected to be hit by a weak
rupee. Reversal of MTM loss may positively surprise the bottomline
Spicejet SpiceJet's revenues are expected to grow by 34.4% in Q3FY11E (higher than other
airlines in our coverage) due to an increase in the capacity. However margins are
expected to remain negative due to rising fuel prices and other operating cost s due
to a weakening rupee
Kingfisher KFA is expected to report revenue de-growth of 36% QoQ due to 26% reduction in
capacity and 5% drop in average yields. Market share is likely to go down to 9.5%
from 14.2% reported in last quarter. Net loss is expected to remain elevated on
account of higher operating costs and interest costs
Source: Company, ICICIdirect.com Research
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