Q4 results season: The two factors that may aid airlines revenue but rupee may play spoilsport
Airlines are expected to report year-on-year growth of 65 per cent in revenue for the quarter ended March 2023, driven by improving fuel costs, say analysts.
Airline operators are set to repeat stellar quarterly results for a second straight quarter, owing to robust numbers for the quarter ended March 2023. Factors such as healthy air traffic and lower prices of aviation turbine fuel (ATF) — or jet fuel — are likely to have driven profitability for airlines in the final three months of the financial year 2022-23, say analysts. InterGlobe Aviation, the operator of airline IndiGo, and SpiceJet are yet to report their financial results for the three-month period.
Investors keenly await the financial results from the aviation space as the India Inc earnings season gathers steam. The quarterly numbers from airline operators are due at a time when the industry has staged a receiver from the depths of the pandemic with gradual growth in passenger traffic.
However, some analysts warn that further weakness in the rupee can be a key challenge for the aviation industry. The rupee finished at 81.84 against the US dollar on Thursday, within 1.5 per cent of an all-time low hit in October last year.
Here's what analysts expect from the upcoming quarterly numbers from the commercial aviation space:
Lower jet fuel cost
Aviation companies are expected to witness 65 per cent year-on-year (YoY) growth in revenue, mainly boosted by lower fuel costs, according to Mitul Shah, Research Analyst at Reliance Securities. Fuel accounts for the lion's share in airlines' operating costs.
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