Aviation Sector Update - PLFs dip in Jan 21 Indigo/Vistara gain market share By ICICI Securities
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As per Jan’21 DGCA release, major airlines have seen a marginal dip in their PLFs, except Air Asia (up 200bps) and Vistara (up 300bps) MoM. SpiceJet continues to report the highest PLF. On MoM basis, domestic traffic grew at a slower pace of 6% in Jan’21 vs 15%/21% witnessed in Dec’20/Nov’20 (Q4 is a seasonally weak quarter compared to Q3). In terms of market share, Indigo/Vistara reported 40bps improvement in Jan’21 to 54.3% / 6.7%, while SpiceJet / GoAir reported a decline of 70bps/20bps to 12.8%/ 8.2%, respectively on MoM basis.
Does current market share present a sustainable picture? Market share of IndiGo can increase further once the government allows 100% capacity operation. Additionally, with recovery of traffic, more lessors will require cash payments and there could be capacity restructuring by weaker airlines. The capacity cuts can also happen due to higher crude prices. We also expect IndiGo to give several A320ceo old fleet in Q4FY21.
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