IGI Logo

Average daily flier witnesses sharp jump to 227K

Weekly average daily fliers came in at 227k in the week ended (W.E) 7 th Aug’21 vs 165k in the W.E. 31th Jul’21. For the W.E. 7 th Aug’21, average number of departures grew to 1,937 vis-à-vis 1,730 in the prior week. The number of fliers per departure increased to 117 vs 90 in the prior week.

The reason could be attributed largely to lower fares driven stimulation. However, it is likely to be tactical as Government restores the fare caps and floors and capacity quotas to protect weaker airlines (Link 1). The advance tickets are also being sold through flash sales as announced by Indigo, SpiceJet, Air Asia and Vistara (Link 2) as forward sales are an important liquidity source for airlines.

This indicates that while there is likely to be a strong demand for travel with return of normalcy, it is also likely to be accompanied with aggressive pricing which will be an overhang on margins. As such, profitable operation operations may remain elusive unless there is sharp cut in supply. Possible news flow of a new airline (Link 3) dims the chance of supply cut.

To Read Complete Report & Disclaimer Click Here

For More ICICI Securities Disclaimer https://www.icicisecurities.com/AboutUs.aspx?About=7

Above views are of the author and not of the website kindly read disclaimer