Monday, September 24, 2018

Domestic passenger growth declines in August

Indian airline stocks tumbled in trade on Monday even as crude oil prices rose and domestic passenger growth for the month of August declined. Domestic passenger growth in August has been the lowest since May at 17.2%, according to data released by the Directorate General of Civil Aviation. Shares of India’s largest airline by market share Interglobe Aviation (which runs the Indigo airline) fell by as much as 3.9% to hit the day’s low at Rs 862.2. Shares of Spicejet fell by nearly 8% to Rs 71.50 at the end of the afternoon session.

Jet Airways’ shares fell by more than 6.9% to end at Rs 214. Notably, while Jet Airways plunged to a 4-year low, shares of Spicejet too fell to its lowest level since March 2017. Notably, brent crude rose over 2% even as the United States administration  issued sanctions to restrict Iranian crude exports, tightening global supply. Jet had shed 72.4% this year as of Friday’s close amid financial woes.

Passengers carried by domestic airlines during Jan-Aug 2018 were 913.95 lakhs as against 754.11 lakhs during the corresponding period of previous year thereby registering a growth of 21.20%, according to DGCA. Interestingly, Indigo retained the highest market share at 41.9%, followed by Jet Airways at 15.2%, Air India 12.7% and Spicejet 12.4%. However, while Indigo has the highest market share, the passenger load factor declined to a 18-month low in August as it added more seats and introduced air routes.
24/09/18 Financial Express