India Aviation Sector Check - Demand Increases; IndiGo Gains Market Share: Motilal Oswal

Motilal Oswal Report

Domestic air passenger traffic grew ~4% YoY in May 2024 to 13.8 million (up ~5% month-on-month). It was above pre-Covid levels. Passenger growth declined for SpiceJet month-on-month, while it increased for IndiGo, Air India Group and Akasa. It grew 20% month-on-month for ‘others’.

Average domestic passenger load factor increased 240 bp month-on-month in May-24. It increased for all the airlines. On-time performance declined 50 bp month-on-month for airlines, and the domestic average was 71.9% in May-24. The cancellation rate increased by 30 bp to 1.2% in May-24.

IndiGo has seen its market share rise after the collapse of GoFirst, which stopped operations in May-23, and it share has surpassed 60% since then. However, it has been more or less stable for the past five months. IndiGo has grounded ~80 planes due to issues with Pratt and Whitney engines.

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