Mumbai: Growth in passenger traffic and the drop in fuel prices during the September quarter are expected to drive profitability of domestic airlines. In the same period last year both the listed airlines Jet Airways and SpiceJet had posted a loss of Rs 43 crore (consolidated) and Rs 310 crore, respectively. This quarter is expected to be different, with analysts expecting both the airlines are expected to report healthy quarterly performance at the operating level.
The second quarter is traditionally a weak quarter, but passenger volumes this year have been higher than the previous. Average occupancy in the second quarter last year was 74.7 and this year it has risen to 79.6 in July-August. Brokerages estimate Jet Airways to report 6-10 per cent growth in standalone revenues on a year-on-year basis, but SpiceJet is expected to post a decline in revenue because of a reduction in its capacity and network. Yields or revenue earned per passenger for both the airlines will be also be lower compared to second quarter last year because of 15 per cent reduction in fares.
"Total passenger traffic may report robust growth of 29.1 percent on a Y-o-Y basis due to improvement in domestic demand coupled with improved connectivity in the overseas segment. Further lower capacity in the industry would help Jet Airways to improve market share market share by 260 basis points to 22.8 percent. However adjusting for lower realisations we expect the company to report revenue growth of 10.3 percent on y-o-y basis. Lower ATF prices may aid in healthy margin expansion during the quarter," ICICI Securities said in its results preview report.
09/10/15 Business Standard
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The second quarter is traditionally a weak quarter, but passenger volumes this year have been higher than the previous. Average occupancy in the second quarter last year was 74.7 and this year it has risen to 79.6 in July-August. Brokerages estimate Jet Airways to report 6-10 per cent growth in standalone revenues on a year-on-year basis, but SpiceJet is expected to post a decline in revenue because of a reduction in its capacity and network. Yields or revenue earned per passenger for both the airlines will be also be lower compared to second quarter last year because of 15 per cent reduction in fares.
"Total passenger traffic may report robust growth of 29.1 percent on a Y-o-Y basis due to improvement in domestic demand coupled with improved connectivity in the overseas segment. Further lower capacity in the industry would help Jet Airways to improve market share market share by 260 basis points to 22.8 percent. However adjusting for lower realisations we expect the company to report revenue growth of 10.3 percent on y-o-y basis. Lower ATF prices may aid in healthy margin expansion during the quarter," ICICI Securities said in its results preview report.
09/10/15 Business Standard
