Operating Parameters Show Improving Trends With Domestic Daily Fliers Breaching Four Lakh: ICICI Securities

ICICI Securities Report

Domestic daily fliers have crossed 400,000 as per trends in December and are now largely in line with levels of 416,000 seen during Dec-19/Jan-20 (pre-Covid).

Dec-22 average daily number of passenger stands at 409,000 versus 390,000 in Nov-22. Average daily departures have increased from 2,722 in Nov-22 to 2,794 in Dec-22 and number of passenger per departures have increased from 143 to 147 during the same period.

Average aviation turbine fuel price is lower by 8% QoQ in Q3 FY23. Domestic load factors are also strong and likely to be higher by 350 basis points QoQ in Q3 FY23 to 83% (estimates).

As such, we expect IndiGo to report strong profits in Q3 FY23. Cost overrun on wet leases/lease extensions akin to H2 FY20 is a risk but one can expect compensation from original equipment manufacturers.

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