Last year, 86.69 lacs passengers on average boarded domestic flights. This year 101.74 lacs passengers boarded flights, it’s almost 17.36% jump over last year. With such an increase in turnover, domestic airline companies are getting all limelight. Stock values of domestic airline firms and other companies associated with domestic airline sector are seeing good results.
Indigo Airlines(NSE:INGL)
With 85% flights of Indigo Airlines flying on schedule, the largest airline in the domestic arena according to its market cap, made its way back to the top. According to reports published on monthly air traffic by DGCA Indigo had most number of passengers (that is 41.91 lacs) in the month of May, which is around 41.2% in a total number of overall domestic air traffic.
Spicejet Ltd (BSE:SPJT)
Spice Jet bagged 94.4% of seat occupancy; it’s the highest rate in domestic airlines. The firm also entered into a contract of buying 40 737 MAX planes from Boeing Co., US manufacturer of Aircraft day before yesterday. It’s an initial pact and MoU valued at $4.7 (current market price) billion was signed yesterday at Paris Airshow.
Some fundamental analysts are expecting huge earnings in Q1FY18 as the domestic airline sector is booming after a long time with strengthening Rupee, fall in Crude prices and reasonable fares. The third quarter of FY17 was a bad quarter for the sector because of demonetization.
There is a great momentum during last two months of this FY in the fares of domestic airlines. The discounted price that domestic airlines are offering for booking tickets in the second quarter of FY18 is also higher than the price of last two years. Despite some negative issues, the overall sector looks a good bet for Traders and speculators. Keep an eye on this sector, especially on leaders such as Indigo Airlines, Spice Jet etc.
Price action traders can do trend analysis on these stocks and take trades accordingly
