Indian Aviation Industry In Sweetest Spot, Elara Capital Says

InterGlobe Aviation

InterGlobe Aviation Ltd. (IndiGo), which dominates a market share of 40 percent, has the largest order book of 430 A320Neo fleets, of which 22 has been delivered and rest will be done till 2026. This large order book ensures that the company would increase its passenger carrying capacity at 20 percent over the next three years, the report said.

This would also help the company to get discounts on maintenance, aircraft purchase and rentals to keep costs under control. The brokerage house also expects IndiGo’s domestic market share to rise up to 43 percent by financial year 2019-2020.


  • Fuel efficient A320Neo would reduce fuel consumption by 15-20% by FY20.
  • Earnings before interest, tax, depreciation and amortisation and rental cost (EBITDAR), and profit expected to grow at a CAGR of 29 percent and 40 percent over FY17-20.


SpiceJet Ltd., which is the fourth largest airline carrier in India, is expected to maintain its passenger load factor above 90 percent mark for the coming two years. Passenger load factor indicates the performance of a travel company and SpiceJet has been able to maintain this at above 90 percent level for more than two years.

Company’s fleet order book of 275 is the second largest among domestic airlines and this would help the company retain its 13 percent market share.


  • EBITDAR and profit expected to grow at a CAGR of 29 and 44 percent over FY17-20.
  • After bankruptcy in 2015, company has successfully re-build its brand with highest on-time performance of more than 80 percent in FY17.

Jet Airways

Jet Airways Ltd., which focuses more on international routes compared to domestic, is expected to see its EBITDAR under-perform compared to peers like IndiGo and SpiceJet. The airline has domestic market share of 18 percent, while international market share of 39 percent among the domestic players.

Jet Airways has an order book of 75 Boeing 737-Max aircraft, most of which will be deployed for international routes indicating a further drop in domestic market share to close to 13 percent by FY20.


  • EBITDAR and profit expected to grow at a CAGR of 13 percent and 7 percent over FY17-20
  • Weakest balance sheet among peers. Net Debt to EBITDA stands at 4.5 times as compared to 1.5 times of SpiceJet and IndiGo is cash positive


Please enter your comment!
Please enter your name here

four × three =