Aviation  firms’  losses  to  lower  sequentially; demand revival is key

By By Livemint

Airlines are still gasping for breath under the pandemic’s dark clouds. Travel demand has been underwhelming. Needless to say, this would reflect in the December quarter results (Q3FY21). SpiceJet Ltd and InterGlobe Aviation Ltd are expected to continue reporting losses, although sequentially lower. InterGlobe runs IndiGo, India’s largest airline.

Note that in the September quarter, InterGlobe and SpiceJet had reported a net loss of about ₹1,200 crore and ₹112 crore, respectively.

“Although aviation turbine fuel prices for the December quarter were up 3.5% (down by 31% year-on-year), increasing scale of operation and an appreciating rupee (1% quarter-on-quarter) are likely to enable narrowing of losses sequentially,” wrote Paarth Gala, an analyst at Prabhudas Lilladher Pvt. Ltd in a report on 11 January.

Understandably, revenues are expected to dip year-on-year, although analysts estimate a decent improvement on a sequential basis, driven by the festive season demand. Additionally, yields, a measure of pricing for airlines, are expected to remain strong.

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