It’s been a crash course for aviation players with almost all listed players taking a drubbing on the bourse as crude soared to $82. Though, of late, the price has fallen below $70, the financials for Q2 of all airlines, including the most profitable IndiGo, have taken a hit. That doesn’t come as a surprise given that Indian carriers incur 40-45% of their total operating costs on fuel, well above the global average, according to a report by Care Ratings. Interestingly, despite the macro headwind, India’s airline passenger traffic grew for the 49th consecutive month in September. In fact, air passenger traffic grew by nearly 17% over the April-September period. Total passenger traffic stood at 169.5 million during the six-month period, with domestic traffic accounting for 80% of the total traffic. Though the passenger load factor (PLF) for all airlines was around 80-85%, IndiGo gained incremental market share. In fact, the largest airline continues to rule the skies with reported PLF of 87.6% for H1FY19. However, with both Jet Airways and Air India struggling, SpiceJet could end up gaining market share in the months ahead.
Flying into the red
Airlines lost money in Q2FY19 even though traffic is at an all-time high
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