Recovering international passenger load factor, benign crude augur well for IndiGo, SpiceJet: ICICI Securities

The average fare in Q3FY20 grew by 3 percent for IndiGo based on the total December passenger data as international PLF has been recovering for the company.

A significant portion of lower revenue per available seat-kilometre (RASK) reported by IndiGo and SpiceJet in Q2FY20 was due to lower PLF, the brokerage noted.

However, IndiGo managed to grow international PLFs YoY at 84 percent in November 2019 and 88 percent in December 2019 compared to 83 percent and 85 percent in November and December 2018, respectively.

"International PLFs are lower YoY for SpiceJet but has improved significantly. From the lows of 77 percent in September/October 19, international PLF of SpiceJet has improved to 85 percent and 88 percent in November and December 2019," the report said.

Total domestic passenger and capacity grew by 3.6 percent and 4.4 percent in CY19, respectively. Excluding Jet Airways, the domestic passenger capacity has grown by 19 percent and 15 percent, respectively.

According to the brokerage, total international passenger and capacity of Indian airlines declined by 4.7 percent and 9.3 percent in CY19. Excluding Jet Airways, the international passenger and capacity of Indian airlines have grown by 32 percent and 23 percent respectively.

Rising PLF has helped IndiGo bridge the gap between capacity and passenger growth significantly, the brokerage added.