Tuesday, September 10, 2019

Air Asia India cut loss, could have done better: ICICI Securities

Air Asia India may have significantly cut its losses in the April-June quarter to ₹15.1 crore from ₹61.82 crore in the same period last year, but it could have done better considering the demand-supply mismatch after the complete grounding of Jet Airways, ICICI Securities Ltd. said. “Despite recording positive EBITDA, the firm has posted a loss of ₹15.1 crore in Q2CY19. This is after a record ₹680-crore loss in FY19,” Ansuman Deb, research analyst, ICICI Securities said.
“Fares [of AAI] remain among the lowest and fleet addition plan is also modest. Free cash flow to support the business remains inadequate for most Indian airlines barring three low-cost carriers [IndiGo, SpiceJet, GoAir],” he added.

The report said though AAI’s market share increased to 7% in the quarter, the average fare growth was significantly lower than peers.

“AAI recorded 8% fare growth in Q2CY19. This is significantly lower than IndiGo [17% fare growth in Q2CY19] and SpiceJet [11% fare growth in Q2CY19]. The fare trajectory of AAI has structurally remained the lowest among Indian players [average fare for AAI has been ₹3,124 for last 10 quarters],” it said.
09/09/19 The Hindu
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