Aviation Sector Update : Worst case scenario analysis on Indigo`s PBT arising from ME crisis by PL Capital
Given the ongoing conflict between US/Israel and Iran, INDIGO IN has suspended its flight operations to Middle East amid air space restrictions. The number of flights that have been suspended over the past/next few days is as follows:-
* 1st March: 166 flights
* 2nd March: 162 flights
* 3rd March: 156 flights
* 4th March: 57 flights (evolving figure)
In this edition, we have analyzed the impact on INDIGO IN’s PBT assuming a worst-case scenario that Middle East operations would remain suspended for entire March-26.
Revenue impact:- For 4QFY26E, INDIGO IN has guided for an ASKM growth of 10%. In line with the guidance, we expect ASKM to increase 10.2% YoY to 46,375mn. Given INDIGO IN’s international ASKM share is ~28-30% and roughly ~40-45% of the international capacity is deployed in Middle East, ASKM under duress is 5,565mn. However, as the Middle East crisis begun in March, time adjusted ASKM at risk is 1,836mn (only one month impact in March is considered). If we keep our existing load factor and yield assumptions intact for 4QFY26E, pax revenue at risk is Rs8,419mn. Detailed breakdown is provided in the table below.
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