A troika of festive travel, low fuel costs, and rupee appreciation may help IndiGo and SpiceJet to narrow their losses during the December quarter of FY21, say analysts. The recovery in earnings, however, may be capped by weak air fares, and stricter travel restrictions amid a new strain in coronavirus (Covid-19).
While most analysts remain divided on the quantum of loss incurred by domestic airlines during the quarter, they unanimously agree that the Indian aviation sector is on a slow but steady path to recovery.
“Average daily domestic passengers increased by almost 120 per cent from Q2FY21 to Q3FY21, partly due to seasonality factor. Yet, average daily passengers in December recovered to only 55 per cent versus last year despite the low fare environment,” noted analysts at global brokerage HSBC.
