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Indian Airline Traffic Flying High

July 16, 2010

Indian airline passenger traffic came in at 4.57 mn passengers for the month of June’2010 showing a strong 21.4% YoY growth broadly in line with our view. Sequential drop of 4.5% in traffic was on account of seasonality. YTD industry has shown a growth of 23.1% in FY11 at 13.6mn passengers. We expect the industry to show a ~15% growth for FY11, at 53 mn passengers. Seat factors for most airlines have remained strong dropping only marginally on a sequential basis despite this being a weaker month. Sustained high seat load factors will likely push up yields.

Jet (including JetLite) has retained its leadership in terms of market share and improved it to 26.5%. On the other hand SpiceJet & Kingfisher largely maintained their market share while NACIL lost share during the month. Indigo and Jet Airways have gained market share while NACIL has lost market share.

Better load factors vs. previous year bode well for the industry. Sequentially seat factors were marginally lower on account of seasonality. Passenger growth for FY10 had been very strong at ~16% YoY. We expect FY11 growth to be ~15% with 53mn passengers. Excess supply of seats have come down sharply over last one year as traffic growth has outpaced the capacity
additions.

Also check out the new Indian Rupee Symbol unveiled by the Government.

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