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MOSL: AVIATION: Domestic air passengers increased ~24% in February; Domestic ASK/RPK grew 18.1/23.3% YoY

AVIATION: Domestic air passengers increased ~24% in February; Domestic ASK/RPK grew 18.1/23.3% YoY; domestic PLF at a peak of 91%

 

• Domestic air passengers in India grew 24.4% YoY to 10.7m in February 2018 (v/s 19.9% YoY in January 2018 and 18.4% YoY in 3QFY18). Passenger (PAX) growth has been in double digits for the last 43 months. However, we believe this strong growth would be at the cost of yields, as seen in headline fares.
• Domestic ASK grew 18.1% YoY in February 2018 (v/s 16.8% YoY in January 2018 and 14.2% YoY in 3QFY18). RPK grew 23.3% YoY in February 2018 (v/s 17.9% YoY in January 2018 and 18.3% YoY in 3QFY18).
• Go Air's PAX grew 36% YoY, led by ASK/RPK growth of 41.3%/40.5% in February 2018. It received seven NEOs in the latter part of 3QFY18, which boosted capacity addition.
• IndiGo's domestic PAX grew 25.5% YoY, led by ASK/RPK growth of 15.4%/20.8% in February 2018 (7.2%/9.1% in 3QFY18), after muted growth in 3QFY18 due to engine issues. IndiGo received seven NEOs post November 17, 2017, which accelerated capacity addition in January/February 2018. However, recent grounding of 9 NEOs will impact capacity addition in March.
• Domestic industry load factor stood at an all-time high of 91% in February 2018 (v/s 89.1% in January 2018 and 87.8% in 3QFY18). IndiGo's load factor stood at 91.8% in February 2018 (v/s 89.7% in January 2018 and 89.6% in 3QFY18).