Aviation share price target

Go First (Go) is reported to have been forced to seek voluntary insolvency resolution proceedings due to ‘serial failure’ of Pratt & Whitney engines resulting in the grounding of 50% of the fleet and is no longer in a position to continue to meet its financial obligations.

The total number of passengers carried by domestic airlines rose 56.8% YoY but fell 3.8% MoM to 120.7 lakh in February. Total departures by scheduled carriers were up YoY to 81,699

We have maintained a tight supply outlook on the Indian Aviation within domestic segment in near to medium term driven by (1) replacement cycle by big players like IndiGo and Tata group, (2) weaker balance sheet for smaller airlines post covid and (3) internationalisation of Indian airlines.

The total number of passengers carried by domestic airlines almost doubled in January, up by 95.5% YoY, but fell marginally MoM to 125.4 lakh. Total departures by scheduled carriers also rose to 88,578.

Average daily PAX has risen strongly in Feb’23 to 420k as against 405k in Jan’23. Average daily departures have increased from 2,898 in Jan’23 to 2954 in Feb’23 but average PAX per departure has increased from 140 in Jan’23 to 142 indicating better PLFs.

The number of passengers carried by domestic airlines increased 15% YoY in December 2022 to 127.3 lakh. Total departures by scheduled carriers rose 7.1% MoM to 84,495 in the same period.

We would want to point out three key trends, namely: 1) overall passenger number remaining above 400k in Jan’23 as we enter a seasonally weak Q4, 2) robust PLFs across airlines in Dec’22 (>85%), and 3) improved financial performance expected in Q3FY23 for all airlines with Vistara reporting breakeven. We expect strong profits for IndiGo.

The number of passengers carried by domestic airlines increased 12.3% YoY in November 2022 to 116.8 lakh. Total departures by scheduled carriers rose 2.3% YoY to 78,909 in the same period.

Domestic daily fliers have crossed 418k as per trends in Dec’22 compared to levels of 416k seen during Dec’19/Jan’20 (pre-covid). Dec’22 average daily PAX stands at 414k vs 390k in Nov’22.

Domestic daily fliers have crossed 400k as per trends in December and are now largely in line with levels of 416k seen during Dec’19/Jan’20 (pre-covid). Dec’22 average daily PAX stands at 409k vs 390k in Nov’22.