IndiGo becomes world's 3rd most valuable airline by market cap
IndiGo Airlines, run by Interglobe Aviation, on Wednesday, became the world's third most valuable airline as its market capitalisation surpassed that of Southwest Airlines. The stock ended 5% higher at Rs 3,807 on BSE.
, run by , on Wednesday, became the world's third most valuable airline as its market capitalisation surpassed that of . The stock ended 5% higher at Rs 3,807 on BSE.While Delta Air Lines stands as the second most valued airline at Rs 3,044 crore, the Irish company Ryan Air stands firmly as the world’s no. 1 in terms of market capitalisation at Rs 3,375 crore.
Airlines, one of India's leading airlines, has demonstrated resilience and growth in the market despite challenges. In recent news, IndiGo reported strong operational performance, including increased passenger traffic and load factors, indicating a robust demand for air travel.
The airline finalized an order for 10 A320neo airplanes on March 15 and as per a new Nuvama report, is in the process of adding A321 XLRs (wide-body aircraft). The aim is to target mid-long-haul markets and is likely to come within the network in the next two years.
“The company also expects international segment’s share to rise to 30% by FY25 (27% currently) and has increased its codeshare destinations to 49 (35 within Europe and seven within Australia) versus 33 in Mar-23 (up 49% YoY)” adds Jal Irani of Nuvama.
The report also states that IndiGo leads with 60% of the domestic aviation market share and a significant 10% share in the international market, behind Air India with 26% share and many other players that amount to a cumulative 44%.
Nuvama, citing its key takeaways from IndiGo’s Investor Day mentions, “IndiGo’s demand remains robust but is impacted due to short-term supply chain constraints. The company expects PAX traffic and capacity to grow in low double-digits in FY25 despite 70+ grounded aircraft and continues to expand aggressively in the international segment, which shall contribute 30% to Available Seat Kilometers flown (ASKM) by FY 25, led by new destinations added. The aviation leader also boasts amongst the lowest Cost of Available Seat Kilometers (CASK) globally ex fuel-and-forex of USD 3.13.”
IndiGo’s unparalleled network coupled with a duopoly-like industry structure will probably drive its profitability and the stock also signals an upside potential after it has doubled the investor wealth in the last one year. As per Trendlyne data, 18 out of 21 analysts recommend buying the stock while three advise to hold.
Source: Stocks-Markets-Economic Times
