The latest May 2019 domestic passenger data shows that, private carriers SpiceJet, Indigo and GoAir have benefited from the shutdown of Jet Airways operations. In May month, the domestic PAX rose by 3%, while market leader IndiGo grew 23.2%, whereas SpiceJet (SJet) grew 23.6% and Go Air (GO) grew 31%. Interestingly, Ansuman Deb, Research Analyst at ICICI Securities said, “The impact would be even higher in the international segment.” According to Deb, IndiGo would have higher total growth considering the several new routes it had launched in the international segment. Aggregate passenger load factor (PLF) improved significantly, with IndiGo, SJet and GO reporting 90.9%, 93.3% and 93.9% PLF, respectively, during May.
At present, the market share of Indigo stands at ~49%; while SpiceJet and Go Air witnessed market share increase to ~14.8%/ 11.1%, respectively.
“Jet market share redistribution to best benefit IndiGo and SJet,” said Deb.
What can we expect ahead?
Now that first quarter of FY20 is right around the corner, Deb says, “The effect of Jet shut down amidst seasonal strong demand should lead to strong earnings growth for IndiGo (combined effect of 30% capacity growth and 5% organic yield growth and additional systemic fare growth). The fare growth of Q4FY17 was 17% for IndiGo. With April and May being better than March, the fare momentum is expected to continue. SJet had limited window to sell the capacity received through Jet planes which should lead to limited fare growth.”
While overall FY20 outlook is still in favor of Jet Airways rivals, but the challenge would be in airfares which has spiked since past few months.
24/06/19 ZeeBiz
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At present, the market share of Indigo stands at ~49%; while SpiceJet and Go Air witnessed market share increase to ~14.8%/ 11.1%, respectively.
“Jet market share redistribution to best benefit IndiGo and SJet,” said Deb.
What can we expect ahead?
Now that first quarter of FY20 is right around the corner, Deb says, “The effect of Jet shut down amidst seasonal strong demand should lead to strong earnings growth for IndiGo (combined effect of 30% capacity growth and 5% organic yield growth and additional systemic fare growth). The fare growth of Q4FY17 was 17% for IndiGo. With April and May being better than March, the fare momentum is expected to continue. SJet had limited window to sell the capacity received through Jet planes which should lead to limited fare growth.”
While overall FY20 outlook is still in favor of Jet Airways rivals, but the challenge would be in airfares which has spiked since past few months.
24/06/19 ZeeBiz
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