Mumbai: The March quarter (Q4) is typically lean for Indian aviation. This time though matters are expected to be better due to the capacity cuts owing to Jet Airways (India) Ltd’s financial troubles. Additionally, the global ban on Boeing 737 Max 8 planes and some flight cancellations from InterGlobe Aviation Ltd have also lowered seat capacity. InterGlobe runs IndiGo, India’s largest airline by market share.
The capacity cuts are expected to result in an improvement in yield. This is aviation speak for the measure of pricing. In fact, yield would be a key parameter to track for investors. However, better yields are expected to come at the cost of passenger load factors. For the December quarter as well, IndiGo and SpiceJet Ltd had seen their yields improve and load factors drop 3.2-3.4 percentage points on a year-on-year basis.
