Q3 preview: IndiGo, SpiceJet to benefit from weak dollar, festive travel

During the three months to December, Brent crude prices declined 28 per cent YoY while domestic aviation turbine fuel (ATF) prices plunged 31 per cent YoY

A troika of festive travel, low fuel costs, and rupee appreciation may help IndiGo and SpiceJet to narrow their losses during the December quarter of FY21, say analysts. The recovery in earnings, however, may be capped by weak air fares, and stricter travel restrictions amid a new strain in coronavirus (Covid-19).

While most analysts remain divided on the quantum of loss incurred by domestic airlines during the quarter, they unanimously agree that the Indian aviation sector is on a slow but steady path to recovery.

“Average daily domestic passengers increased by almost 120 per cent from Q2FY21 to Q3FY21, partly