IndiGo, SpiceJet share price decline up to 5% as parliamentary panel proposes route-specific capping of airfares
- Stock Market Today: IndiGo, SpiceJet share price declined up to 5% in the intraday trades as a PTI report suggest parliamentary panel proposing route-specific capping of airfares.
Share prices of Airlines as InterGlobe Aviation, SpiceJet and even Jet Airways declined 2-5% on Friday. The news flow remained strong around route-specific capping of airfares being suggested by a parliamentary panel.
CNBC- TV 18 referring to PTI report has said that Parliamentary panel proposes route-specific capping of airfares, the panel proposes setting up of a separate entity to control air ticket prices.
The Parliamentary Standing Committee on Transport, Tourism and Culture in its report tabled on Thursday is said to have spelt out the measures that can be taken by the government on its recommendations and observations on the issue of fixing airfares.
While InterGlobe Aviation share price slipped almost 5% before seeing a recovery. Share of Spice jet also declined up to 5.5% before seeing a recovery Even Jet Airways share price was down more than 2%.
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The operational airlines as InterGlobe Aviation and Spice Jet have benefited for tight supplies as GoAir planes were grounded amidst cash crunch.
The airlines were expected to report good Q3 performance.
InterGlobe Aviation already has reported revenue from Operations increasing by 30.3% to ₹19,452 Crore during Q3. The operating performance saw a sharp improvement as earnings before interest tax depreciation and amortisation at ₹5475 crore grew 61% over ₹3399 Crore during the year ago quarter. Ebitda margins as 28.1% expanded significantly over 22.8% in the previous quarter.
Excluding foreign exchange loss, profit amounted to ₹3049 crore compared to profit of ₹2009 Crore in the year ago quarter, up 51.8%.
For InterGlobe Aviation Yield increased by 2.0% during Q3. Analysts at Prabhudas Lilladher said that yields in January-24 are similar to same period last year and are expected to remain steady in February and March. Thus, for 4QFY24 yields should more or less remain steady when compared with 4QFY23.
Analysts at Elara Securities had pegged its aviation coverage universe companies as InterGlobe Aviation and (Indigo) and SpiceJet reporting a combined adjusted net profit of ₹1761 Crore in Q3FY24 versus ₹425 crore in Q2FY24 and ₹2230 crores in Q3FY23. Referring to Directorate General of Civil Aviation (DGCA) data, analysts at Elara Securities said that Q3FY24 domestic demand was up 9% YoY while domestic capacity was up 11% YoY, which led to a 2% fall in airfare.
Analysts at Elara had said that FY25 may continue to see robust demand growth of 15% if airlines keep airfares under check. The competition as per analysts comes from ₹ 2250 crore equity infusion in Spicejet, and interest shown by three bidders, including SpiceJet, to revive the grounded GoFirst airline. Also pilot shortage issues are behind for Akasa Air and capacity growth by Tata Group airlines.
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