IndiGo and SpiceJet Surge: Domestic Air Traffic Hits 5 Lakh in a Day

The Indian aviation sector achieved a significant milestone on November 17, 2024, as domestic air traffic surpassed 5 lakh passengers in a single day. With 5,05,412 passengers travelling on 3,173 flight departures, this marks the first instance of such high single-day traffic in the country. This surge was driven by the festive and wedding seasons, highlighting the growing preference for air travel among Indian consumers.

Rising Domestic Airline Performance

This achievement reflects the robust growth in India’s aviation industry. Domestic air traffic growth during October and November reached 10% and 11%, respectively. Airlines have consistently improved their passenger load factors (PLFs), with some carriers achieving over 90% occupancy, showcasing operational efficiency and increased customer trust.

IndiGo and SpiceJet Shares Surge

The record-breaking traffic numbers had a positive impact on aviation stocks. On November 19, 2024, shares of InterGlobe Aviation (IndiGo) and SpiceJet surged by 3% in intraday trade. Investors reacted positively to the milestone, signalling confidence in the sector’s growth trajectory.

IndiGo, the market leader, recorded a 90% PLF, up from 85.6% during the same period last year, despite facing challenges like increased fuel costs and aircraft groundings in Q2 FY25. SpiceJet, despite holding a smaller market share, also benefitted from the overall growth in passenger numbers.

IndiGo’s Market Dominance

IndiGo continues to dominate Indian skies with a 63% market share as of September 2024, followed by Air India at 15%, Akasa Air at 4.4%, and SpiceJet at 2%. The airline’s revenue for Q2 FY25 rose 13.6% YoY to ₹16,969.6 crore, even though it reported a net loss of ₹986 crore due to higher fuel expenses. IndiGo’s strong market presence underscores its ability to leverage growth opportunities effectively.

Growth Trends in Indian Aviation

Domestic air passenger traffic grew by 6% YoY to 1.30 crore passengers in September 2024, compared to 1.22 crore passengers in September 2023. This growth reflects the resilience of India’s aviation sector, supported by increased flight operations and improved infrastructure.

The consistent rise in traffic highlights the expanding accessibility of air travel and its growing popularity as a preferred mode of transportation.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.