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As Indian took more flights to travel amid fewer Covid-19 cases early in this year, the outlook for the Indian airlines began to look promising. However, as cases began to soar from early March and as fuel prices began climbing on global demand optimism, the recovery hopes faded away.
This contrasting situation has analysts divided over InterGlobe Aviation-owned IndiGo’s March quarter performance (Q4FY21). The budget airline is scheduled to report its March quarter earnings on Saturday, June 5 where it may report lower capacity utilization, mark-to-market (MTM) loss due to rupee depreciation, and muted passenger load factor (PLF), say analysts.
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“Green shoots of growth were expected at the end of December quarter of the previous fiscal (Q3FY21), supported through an increase in passenger traffic in January. Moreover, with the vaccine rollout, the aviation sector was expected to be out of headwinds. However, the onset of the second wave and ensuing localized lockdowns across India could lead to a delay in passenger traffic recovery,” wrote Gagan Dixit, research analyst at Elara Capital in a co-authored report with Rachael Alva.
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