Experts have disputed India's largest airline as Jhunjhunwala, others appear to be flying high

Experts have disputed India’s largest airline as Jhunjhunwala, others appear to be flying high – Mail Bonus

New Delhi: Big bull Rakesh Jhunjhunwala plans to fly high as his dream project Akasa Air got its first aircraft, the Boeing 737 Max – one of the most fuel-efficient and greenest aircraft.

Wings to Jhujhunwala’s dream project could lead to a crash landing for current registered and weak players such as

(Indigo) and where both counters are hovering around the 52 week minimum.

Indigo is India’s largest airline, with a market share of 55.5 percent as of January 2022.



Shares of Indigo have fallen by 32 percent since the 52-week high, while SpiceJet has fallen by up to 55 percent since the last high.

Securities companies

has repeatedly “sold” a rating on Indigo on the basis of increased competitive strength in the aviation industry; Margin pressure on rising ATF prices and rupee depreciation and Rakesh Gangwal’s decision to reduce its 36.6 percent stake in the company over the next 5 years is likely to limit stock performance.

Elara Capital, on the other hand, has an “buy” rating on Interglobe Aviation but has lowered its target price to 2,527 rupees behind higher fuel costs, indicating a 50 percent increase from the previous closure.

“We continue to be positive in light of the company’s strong balance sheet, market leaders who would help to achieve the greatest growth in domestic demand, strong economic growth support and an increase in international travel with high margins,” she added.

The RJ-backed new entrant is likely to make its first flight at the end of July 2022, as Vinay Dubey, CEO of Akasa Air, said. Bookings could open the first week of July.

Dubey has made clear its intentions that Akasa Air will have extremely affordable fares with first-class customer service, despite costs and challenges in the near future. “The aviation industry around the world is very competitive,” he said.

Despite the rise in the opening theme, which encourages domestic and global travel, market analysts are concerned about rising fuel prices, the depreciation of the currency and increased competition as the headwind to challenge the recovery of aviation.

JM Financial said Tata Group’s combined market share was over 22 percent in April 2022 and the recent acquisition of Air India by Air India is likely to provide greater synergies and greater competitiveness. “Competitive strength in the industry is expected to intensify with the introduction of Akasa Air and

“He added.

With ATF prices reaching an all-time high, the profitability of airlines will have an impact, said JM Financial. “Airlines may need to take further increases to offset the rise in ATF prices, possibly to achieve elasticity in demand in the tourism industry.

Air travel around the world has declined sharply, thanks to the lifting of the majority of travel restrictions following a two-year pandemic. The Indian aviation sector has to cope with the growing demand both domestically and internationally.

It is not just leisure or holiday trips that are resumed. The reopening of offices has led to business trips where people are coming out of the hotspots and hosting events and meetings in person around the world.

Another domestic securities firm,

said that the average daily air travel was 3.75 lakh to date in June 2022 compared to 3.68 lakh for May 2022.

“The average number of daily departures remained unchanged at 2,821, an increase of 2% MoM, and the number of flights per departure remained unchanged at 133, indicating stable PLFs,” she added.

ICICI Securities said that the yield will be tested on Q2FY23 against seasonally weak periods and improving capacity. “Indigo expects 55-60 percent year-on-year growth in average seat-kilometers (ASK) on FY23.”

A number of airlines will seek to add staff and aircraft to their fleet to meet the growing demand in the industry. This in turn will add to their expenses and EBITDA margin in the near future.

Not only that, Jet Airways – the airlines on the ground for more than three years – is looking to revive it in September 2022, increasing competition in the industry. The Jalan-Kalrock conglomerate has received its operating license from the DGCA.


(Disclaimer: The opinions, recommendations, opinions and opinions of the experts are their own. This does not represent the views of the Economic Times)

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