Indian Equity Market:Updated 4th October.: Next Expected Boom in Aviation Sector

 Even General Public is finding Air Travel:- Convenient,Time Saving and at Optimum Cost:
Passangers are growing @20% year on year basis  Annually 9Crore Domestic & 5Crore International Passangers.
Lower Oil prices & Interest Rates.
Average Air Fare are now available at 2AC or Tatkal3rdAC.
Mostly Long Route Air Journey are found Time Saver. Cochin-Chandigarh Train Journey 50Hours Air Journey 6 Hours. Train Journey Baroda-Bangalore 30Hours+: Air Journey 3Hours.
Expected Investment in Aviation Sector:-
Air Port Developments:Rs2.5 lacs Crores.
Addition of New Fleet  :Rs3.0 lacs Crores.
125 to 150 Small Airports may have  Regular Flights under RCS. Ensuring more development for Tier2 & Tier 3 Cities.
Generation of Huge Employment opportunities. 

 5th Sept.2016:- Better days started for Indian Aviation Industry:-

 Aviation Ministery, Govt. of India have taken effective Steps in Regional Connectivity Scheme. 11 small Airports are ascertained in One or more States from where Regular flights would operate.

• Watch Regularly the Aviation Sector on Bourses. And Spice Jet may be on the top.

• The  New Civil Aviation Policy has developed a Launching Hanger for Spice Jet to achieve Next Progress Height.

• In the New Policy:The Regional Connectivity Scheme (RCS) has given a very good Chance to enhance Productivity of Air Lines.

• The Ministry of Aviation has recognised 30 to 31 Airports which are Non operational at present. Under RCS Govt. has decided to operationalize these Airports. It is a ready Infrastructure for the Existing Airlines. e.g.Delhi-Jaipur-Delhi Airlines is extended up-to Jaislmer providing More Seat Occupancy to Airlines besides providing deserving Revenue to State Government.

• The excise duty on ATF sold at the un-served airports will be at 2 per cent; VAT on ATF will not be more than 1 per cent; service tax on the tickets will be at 1 per cent. Besides, there will be no landing, parking, air navigation charges on the un-served airport by the AAI,”.

• The Regional airports is likely to have a corpus of ₹500 crore per annum. The Fund will be aided through a cess in order to subsidise flights connecting un-served airports under RCS. The scheme has proposed capping air fares at ₹2,500 for one-hour flights connecting un-served airports.  

•  The Maintenance Repair and overhaul(MRO) would be taken care of by  this Subsidy.

•  Spice Jet is having Firm Standing in highly Capital Intensive Aviation Industry.

• One must buy and hold this Share with a long term view. In short term also the Share would     provide Reasonable Returns.Buy on the aviation stock with a target price of Rs 128, based on 12.5 times FY17e EPS.

• With aviation companies performing better on parameters related to both revenues and profitability, the brokerage believes that Spice-Jet is in a strong position to provide the best profitability growth in the sector.

•   It offers cheaper valuations as compared to the industry leader Interglobe Aviation, the brokerage said.

• With its strategy to increase non-passenger related revenues, SJ is focusing on cargo services and other ancillary services like Food and Beverage and this foray is expected to result in increasing the share of cargo services revenues from 2.9 per cent of sales in FY15 to 5.3 per cent in FY18E.

 

• Expecting a total revenue CAGR of 11.3 per cent over FY15-18E and an EBITDA CAGR of 79.3 per cent over the same period,"

• SpiceJet flew 29.93 lakh passengers during the first three months of Calender Year 2016.

•  It had a market share of 13 per cent of the domestic passenger traffic in March, according to data released by the Directorate General of Civil Aviation (DGCA) recently.

• The company's passenger load factor at more than 90 per cent during the January-March quarter was the highest for the industry.

•  Improved Working:- Its summer schedule with three new routes and six more frequencies of its flight on some sectors.  The three new services are on the Mumbai- Udaipur, Tirupati-Vijayawada and Vijayawada-Vishakhapatnam sectors effective April 16, the airline said in a statement,

• It has enhance frequencies between Delhi-Srinagar,Hyderabad- Chennai, Delhi-Dharamshala, Chennai- Vishakhapatnam and Hyderabad-Bengaluru from March 27,2016.

• The airline has started connecting Tirupati from Mumbai, Delhi and Ahmedabad: Internationally  Dubai, Colombo and Bangkok from Vijaywada and Tirupati.

• With these new services, the airline increased its operation to 306 daily flights from 240 in the last summer.

• Increased Seating Capacity:-To tap the rising leisure and business travellers and considering the tourist and commercial demand,  The airline has also increased its seating capacity on various domestic routes by changing planes, from the 78-seater Bombardier Q400s to Boeing 737s which can carry 186 passengers on the Pune-Goa and Delhi-Dehradun sectors. Daily flights to 40 destinations,34 domestic and six international with its 26 Boeing 737NGs and two Airbus A320s along with 14 Bombardier Q-400s planes.  Summer Schedule is applicable From the last Sunday of March to the last Saturday of October.

• Over All Growth:-India's domestic air passenger traffic grew by a whopping 20.2 per cent in 2015 over the previous year, helped by higher economic growth and increase in number of flights across domestic airlines network, according to the global airlines body IATA.

• Air travellers in the country is slated to rise more than Three fold to 218 million by 2025 from 70 million in 2015 and each metro requires a second greenfield airport to handle the traffic, a report says.

• The International Air Transport Association (IATA) recently said that air traffic growth in India at more than 12% outstripped all countries in the first six Months of the year. 

•  According to CAPA (Centre for Asia Pacific Aviation), aviation can contribute 5 per cent to the country’s GDP or $250 billion by 2025.

• International traffic to the country would be 120 million, up from 51 million, the report said, adding that this would further jump to 254 million by 2035, while the domestic load would stand at 527 million by 2035. Similarly, the report pegs the fleet strength to rise more than threefold to 1,084 by 2025 from 394 in 2015 and further to 2,564 by 2035.

• The Rakesh Jhujunwala is holding 1lac Shares(around 2% of the Total Share holding) in this Company.