Domestic passengers number witnessed another month of moderate growth in September at 16.5 per cent against over 20 per cent growth seen for 15 consecutive months between November 2015 and January 2017.

Domestic capacity addition (ASK) growth stood low at 15 per cent, driven by near zero growth in distance flown, even as fleet addition continued. Indigo reported low ASK expansion of 6 per cent as growth in fleet addition was offset by decline in distance flown. Indigo, a market leader, witnessed a decline in market share, while SpiceJet gained market share, driven by high ASK growth and high PLF (94.2 per cent). At the current crude price of $58/bbl and rupee/dollar rate of 64.8, aviation stocks have limited upside from CMP.

India’s domestic passengers carried growth has moderated at 15 per cent, after a 20 per cent expansion for 15 consecutive months. Domestic passengers (PAX) carried increased 16.5 per cent YoY to 9.6 million in September. Indigo’s domestic PAX growth reduced significantly to 10.6 per cent YoY and it carried 3.6 million passengers, while SpiceJet carried 1.3 million passengers (+28.1 per cent YoY), Jet Airways and Jet Lite 1.7 million (9.9 per cent YoY) and Air India 1.2 million (4 per cent YoY).

In September, domestic ASK growth stood low at 14.8 per cent to 10.7 billion, driven by near zero growth in distance flown, even as fleet addition continued. Indigo and SpiceJet’s domestic ASK increased 5.8 per cent and 28.9 per cent YoY to 4.2 billion and 1.2 billion, respectively. Jet Airways and Jet Lite’s combined domestic ASK increased 14.3 per cent YoY to 1.9 billion and Air India’s domestic ASK increased 8.1 per cent YoY to 1.4 billion. Indigo’s ASK growth declined significantly to 5.8 per cent, as a 23.1 per cent increase in fleet was partially offset by a 14 per cent decrease in distance flown, while SpiceJet’s 28.9 per cent growth in ASK was driven by a 17 per cent increase in aircraft and 10 per cent increase in distance flown.

Domestic RPK increased 17.5 per cent YoY to 9.1 billion. Indigo’s domestic RPK increased 9.8 per cent YoY to 3.6 billion, while SpiceJet’s domestic RPK increased 24 per cent YoY to 1.1 billion, driven by high PLF of 94.2 per cent; Jet Airways and Jet Lite’s domestic RPK increased 15.7 per cent YoY to 1.5bn and Air India’s domestic RPK increased 7.1 per cent YoY to 1.1 billion.

Indigo, a market leader, reported domestic market share (by PAX carried) of 38.2 per cent (-2.0ppt YoY), SpiceJet’s market share increased 1.3ppt to 13.8 per cent, driven by a record high PLF and high ASK growth. Jet Airways + Jet Lite (market share of 17.6 per cent) and Air India (12.2 per cent) lost market share by 1.1ppt and 1.5ppt YoY, respectively, due to their restricted aircraft addition plans.

Industry’s operational performance has remained top-notch in September. Indigo

and SpiceJet maintained a low cancellation of 0.3 per cent and 0.6 per cent, respectively against the industry average of 0.8 per cent. In terms of PAX complaints, both Indigo/SpiceJet performed better than the industry average and reported 0.2/0.3 complaints per 10,000 PAX, respectively. Indigo/SpiceJet reported 89.8 per cent/86.4 per cent on-time performance at the four metros.