Will Indigo’s reign over the Indian skies expand post COVID-19?

Investors are evidently less worried about the future prospects of InterGlobe Aviation Ltd, compared to, say, those of SpiceJet Ltd. In the past five weeks, the latter’s shares have plunged nearly 60%, while those of InterGlobe have fallen 33%.

InterGlobe runs IndiGo, India’s largest airline with a 48% market share for domestic air travel.

“IndiGo is in the best shape with cash availability of 6-7 months, whereas other airlines can survive for 1-2 months only,” said Varun Ginodia, analyst at Ambit Capital Pvt. Ltd.

Analysts at Kotak Institutional Equities echoed the view: “IndiGo’s sufficient cash buffer ( ₹9,400 crore as of December 2019) should be enough to weather this storm, though other airlines will need external support in the form of interest payment moratoriums and lower taxation on crude and other imports.”