This post is about Indian airline stocks and Indian aviation stocks. We hope that by the end of this post you will have a better understanding of the Indian airline and aviation sector and understand the factors that affect the stock price and key metrics that can be used to analyze a company.
As the GDP, per capita income and disposable income in India increases the demand for more air travel will happen subsequently. Any investor who is looking to invest in the growth story of the Indian airline sector must keep an eye on these stocks. Investing in airline stocks in India, like any investment, carries both potential opportunities and risks.
Table of Contents
What is difference between Airline and Aviation Industry
Is the airline and the aviation industry the same? Well, technically speaking, the answer is no.
Airline industry and aviation industry are most commonly used interchangeably, even though they refer to different industries.
An airline industry or airline company can be defined as a company that flies airplanes to transport people or goods. Example: Indigo Airlines, SpiceJet Airlines.
The aviation industry refers to companies that are involved in the manufacturing, operating, research, development, and maintenance of aircraft. Aviation encompasses a broader industry than the airline industry. Example: Boeing
It’s also technically correct to say the airline industry is a small part of the aviation industry.
Indian Airline and Aviation Stocks List
Below is the list of Indian airline stocks and Aviation stocks that is traded in both BSE and NSE
| No | Company Name | Market | Trading Symbol | Sector |
|---|---|---|---|---|
| 1. | InterGlobe Aviation Limited | NSE & BSE | INDIGO | Airlines |
| 2. | SpiceJet | BSE | BOM: SPICEJET | 500285 | Airlines |
| 3. | Jet Airways Limited | NSE & BSE | JETAIRWAYS,JETAIRWAYS-BZ | Airlines |
| 4. | Hindustan Aeronautics Ltd | NSE & BSE | HAL | Aviation |
| 5. | Global Vectra Helicorp Limited | NSE & BSE | GLOBALVECT | Airlines(Helicopter) |
| 6. | Taal Enterprises Limited | BSE | BOM: TAALENT | 539956 | Aviation |
| 7. | Taneja Aerospace and Aviation Limited | BSE | BOM: TANAA | 522229 | Aviation |
Factors Affecting Indian Airline Stocks
- Fuel Prices: Since the majority of India’s fuel is imported, fuel prices can have an adverse effect on the operational costs of an airline company. Fluctuating oil prices can also have an immediate effect on the operational costs of an airline which in turn affect the price of airline stocks.
- Labor Cost: The cost it takes to hire employees to operate the airline is also another important cost affecting an airline company.
- Regulatory Environment: Regulations, and government decisions by Aviation ministry of India play a crucial role in the operation of a airline company. Keep an eye on changes in aviation rules, taxation, and infrastructure development.
- Government Policies: Though the Indian government policies have been largely favorable to domestic airline, it’s safe to keep an eye out on policies which can affect the price of airline stocks. For example a reduction of tax on import or manufacturing of aircrafts can help boost the airlines industry.
- Macroeconomic Trends: Economic conditions, consumer spending, and travel trends in India influence the demand for air travel. Holiday season are some of the major earning season for Indian airlines. You could have noticed how the prices of seats shot up as Diwali approached. Similarly the covid-19 pandemic wrecked havoc on airline industry as air travel came to an abrupt halt.
- Geopolitical Factors: Wars and others geopolitical factors can cause a change in oil prices or can cause cancelled flight to certain locations. Which can affect the prices of airline stocks.
Fuel Prices and Labor cost are the major operating costs of most airlines company. Other minor cost such as Food and Beverage, maintancence, luggage handling fees, airport fees, marketing, promotion as a whole can affect the operating costs as well but is insignificant when seen as a separate entity.
Important Metrics of Airline Stocks
If you read through the annual report or investor presentation of Airline companies you might have come across some of the metrics and have wondering what they are. A few of them are
- RPK: It stands for Revenue Passenger Kilometer.
- RASK: Revenue per Available Seat-Kilometer.
- CASK: Cost of Available Seat Kilometer.
- Load Factor
- ASK – Available seat per kilometer
The bottom-line
As India’s GDP and economy grow, the amount of disposable income in the hands of Indians will also grow. With higher disposable income, people tend to seek air travel over other modes of transport as it’s faster and more convenient. The Indian government is also taking measures to bolster the aviation industry in India.
Despite the above points, an investor should also look at risk factors when looking to invest in airline stocks. Volatile oil prices, geopolitical events such as wars, which also affect oil prices, and unforeseen events such as COVID-19 can also affect the prices of airline stocks.
FAQ
Does Airline stock in India have a Index?
No, there is no index for airline and aviation stocks.
Which company has the highest market capitalization among the airline sector?
Currently, Indigo Airlines has the highest market capitalization.
Why is Vistara not among the stock list?
Vistara which is privately owned by Tata Sons Private Limited and Singapore Airlines Limited and is not a publicly listed company at the moment.
