Aviation - Increased domestic PLF across players driven by low capacity addition: JM Financial

JM Financial's sector report on Aviation

 
Domestic passengers carried witnessed moderate growth of 17% in Nov’17. Domestic capacity addition (ASK) growth stood low at c.10.2%, driven by de-growth in distance flown, even as fleet addition continued. Indigo, a market leader, witnessed a YoY decline in market share, driven by muted ASK growth of c.3%, as growth in fleet addition was offset by the decline in distance flown. SpiceJet maintained market share, driven by record high PLF (95.5%). During the month, domestic PLF increased YoY across players, driven by low capacity addition. At the current crude price of USD 64/bbl and INR/USD rate of 64, aviation stocks have limited upside from CMP.

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