Airlines, Go Air, Indigo, Spice Jet

IndiGo and SpiceJet breadwinners even as aviation sector battles engine issues, seasonal glitches

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India’s domestic aviation industry has been flying high and clocking double-digit passenger growth for long and the month of July 2017 was no exception. While industry grew by 12.5 percent, it was lower compared to the last two months. Apart from seasonal weakness, performance was marred by engine issues faced by Indigo and GoAir. This also had an impact on the overall domestic load factor that fell 270bps (MoM) to 83.2 percent in July 2017.

Despite IndiGo’s engine issues, we continue to like the business on the back of its leadership in the domestic market, cost efficiencies and plan to foray into a long-haul low-cost airline. In addition, we like SpiceJet on the back of its turnaround, market share expansion and comfortable valuations.

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Aviation News India