IndiGo shares rise after airline signs codeshare pact with British Airways

InterGlobe Aviation (IndiGo) shares rose on Friday after the company announced a codeshare partnership with the United Kingdom's British Airways. The stock of InterGlobe Aviation—which owns and operates the IndiGo airline—rose by Rs 20.9, or 0.9 per cent, to touch Rs 2,407 apiece at the strongest level of the session so far on BSE. A codeshare agreement enables airlines to sell seats on each other's flights. 

The two airlines, IndiGo and British Airways, signed the agreement to boost their connections between India and the UK. The partnership enables British Airways to expand the choice available to their customers for journeys to and from Heathrow in London using IndiGo's network in India, IndiGo said. 

The partnership with IndiGo means that passengers will be able to book their entire journey on one ticket, allowing seamless travel all the way from London to their final destination, offering more choice and flexibility for customers, said Neil Chernoff, Director of Network and Alliances at British Airways. 

The agreement will enable passengers to experience improved connectivity between the two countries for travel from October 12. Codeshare flights will be available for booking from Thursday, subject to government approval.

"With this codeshare partnership with IndiGo, British Airways will now be able to add three additional routes to their existing network including Amritsar to London Heathrow via New Delhi, Kochi to London Heathrow via Mumbai, Ahmedabad to London Heathrow via Mumbai, Goa to London Heathrow via Mumbai, Thiruvananthapuram to London Heathrow via Mumbai (new), Kolkata to London Heathrow via Mumbai, Rajkot to London Heathrow via Mumbai (new) and Vadodara to London Heathrow via Mumbai (new)," said the IndiGo spokesperson.

"The agreement means that passengers travelling, for example from Rajkot to London, or transiting through London Heathrow (or vice versa) will be able to connect to their destination on a single ticket," said the spokesperson.

British Airways operates 56 flights a week to five Indian cities: New Delhi, Mumbai, Chennai, Bangalore and Hyderabad.

IndiGo already has codeshare partnerships with Turkish Airlines, Qatar Airways, American Airlines, Air France-KLM, Qantas and Virgin Atlantic, and an interline pact with Jetstar.

Is it a good time to buy, sell or hold IndiGo shares?

Zee Business analyst Varun Dubey recommends buying InterGlobe Aviation futures for a short-term price target of Rs 2,460 with a stop loss at Rs 2,370. 

Analysts at Geojit Financial Services have a positive outlook on the airline, valuing the stock at a price-to-earnings multiple of 20 times its earnings estimate for 2024-25.

According to Geojit, which has a 'buy' rating on IndiGo with a price target of Rs 3,005, IndiGo is one of the most efficient low cost air carriers with a market share of 54 per cent in the country's aviation sector. The brokerage's target implies an upside of almost 26 per cent in the stock from Thursday's price. It expects higher capacity utilisation and cost rationalisation, and stable ticket prices to boost IndiGo's earnings going forward. 

"Healthy passenger volume, strong ticket prices, and an ease in fuel prices will support earnings momentum in FY24E," wrote the analysts in a research report dated August 4. 

With inputs from agencies

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