One of the best private airlines of the last decade, Jet Airways, has suspended operations temporarily in the absence of sufficient funding. However, Jet Airways' competitors, IndiGo and SpiceJet, are utilising the benefits of Jet's situation. Shares of the two carriers have seen their fortune improve on the stock exchanges.

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IndiGo shares rose over 10 percent in a week, while SpiceJet shares advanced over 20 percent. On April 16, SpiceJet settled 11 percent high and IndiGo gained 7.35 percent.

Between the two, IndiGo stands as the leader in the aviation space, with a market share of 43 percent, while SpiceJet has 13.5 percent. This makes IndiGo's parent InterGlobe's market capitalization close to eight times compared to its smaller rival. However, SpiceJet can gain incremental market share in future as it has grabbed a large number of slots which was held by Jet earlier.

IndiGo's load factor is lower than that of SpiceJet's as it commands better pricing power in comparison with its peers. The difference in pricing power arrives from different routes other than the metros. In case of new planes, IndiGo added more to its fleet in Q3FY19. In fact, the market leader has expanded its services across international boundaries.

Coming to the financials, it is very clear in the table that IndiGo has performed better in the last three quarters, this financial year. In Q2FY19, all airlines along with Jet were hit hard by the surge in ATF (aviation turbine fuel) currency depreciation and lower yields. Moving ahead, the increasing fuel costs negated the gains coming from the surge in passenger demand for air travel.

Currently, IndiGo and SpiceJet are continuously adding new planes to their fleet. On April 8, IndiGo announced to introduce 20 additional domestic flights each from Mumbai and New Delhi from April 15. Meanwhile, SpiceJet announced that it will add five 90-seater Bombardier Q400 aircraft, increasing its Bombardier fleet size to 32.

First Published:Apr 17, 2019 3:37 PM IST