Interglobe Aviation Limited was incorporated in 2006, Interglobe Aviation Ltd is India based aviation, hospitality and travel related service provider. Company own and operate 'IndiGo', India's largest airline with over 33 % of domestic passenger market share. IndiGo Airline, the low-cost airline carries the brand message of providing "low fares, on-time flights and a hassle-free experience" to air travellers in India. IndiGo has scheduled services to 33 cities within India and 5 cities like Bangkok, Dubai, Kathmandu, Muscat and Singapore internationally with 623 daily flights. Company also has a joint venture with Accor Asia Pacific since 2004 to develop a network of 'ibis' hotels throughout India, Nepal, Sri Lanka and Bangladesh. With 10 ibis hotels open and 9 under development, the company shall have a portfolio of 19 operational hotels with room inventory of about 3500 rooms by 2017. The company have maintained its discipline in execution of the low-cost carrier business model with single aircraft type, high aircraft utilization, high operational reliability, no-frills product and low distribution costs. Company enjoys a structural cost advantage. Large Airbus aircraft orders enable favorable terms on aircraft, engines and components. Company has Young, modern and fuel-efficient fleet, Strong brand recognition, maintained consistent profitability and strong cash flow generation, balance sheet and liquidity position. Interglobe Aviation Ltd (IAL) has an ordered 430 aircrafts and expects delivery of 14 aircrafts before this fiscal end. IAL’s domestic passenger volume increased at a CAGR of 25.8 % during fiscal 2011-2015 from 95 lakhs to 2.37 Cr. India is one of the world’s largest and fastest-growing air travel markets, according to the report by Centre for Asia Pacific Aviation India Private Limited (CAPA) Report. Historically, the Indian air travel market was comprised of individuals in relatively high income brackets as well as corporate travellers. Additionally, many members of the Indian middle class did not have a viable option to meet their long distance travel requirements as surface transportation infrastructure was relatively poor and air travel was relatively expensive. Starting in 2003, the Indian government introduced several measures to further liberalize the air travel market, including a reduction in fuel excise taxes, elimination of the 15 % Inland Travel Tax and the awarding of new airline licenses to private operators, which is reflected in the growth of domestic passenger volume at a CAGR of 19.4 %. Since then a large number of Low Cost Carriers (LCCs) have entered the Indian air travel market and stimulated prices through their low-cost business models. By using price stimulation as a core business strategy, LCCs were able to cater to India’s middle class segment. In the decade that followed, Indian air travel entered a period of considerable growth. By 2014, India’s air travel market had become the sixth largest in the world as measured by total domestic seats of approx. 9.73 Cr and ninth largest in the world by total domestic and international seats of approx. 15.59 Cr. Going forward, the domestic Indian aviation market is forecast to be the world’s fastest growing aviation market with Revenue Passenger Kilometers (RPKs) growing at a CAGR of 9.5 % between 2013 and 2033. Going forward, the Indian air travel market is expected to enter a period of accelerated growth. Between FY2015 and FY2020, domestic ASKs are forecast to grow at a CAGR of 12.7 %, while domestic passenger volume is forecast to grow at a CAGR of 12.8 %, according to the CAPA Report. India is expected to be one of the fastest growing major economies in the world over the next four years, with Real GDP expected to grow at a CAGR of 7.1 % between CY2014 and CY2019. This rate of Real GDP growth exceeds that of China, APAC, and the world over the same period, which is forecast to grow at a CAGR of 6.4 %, 4.5 %, and 3.0 %, respectively. The IMF expects India to surpass China’s Real GDP growth rate in CY2015 and CY2016, with respective growth rates of 7.5 % compared to 6.8 % and 7.5 % as compared to 6.3 %. India is the second most populous country in the world with 1.26 billion people through CY2014, according to the IMF. The IMF projects that India’s population will grow at a CAGR of 1.3 % to reach 1.34 billion by the end of CY2019. The expected growth in India’s population between CY2014 and CY2019 is higher than the average growth in population of the top 20 domestic air travel markets in the world. The increase in the Indian population is expected to be a continuing driver of growth in the Indian air travel market. India’s annual per capita income has grown at a CAGR of 12.6 %, from Rs. 46,249 in FY2010 to Rs. 74,380 in FY2015. India’s growth in per capita income and overall population has caused the rapid expansion in the size of India’s middle class, defined as households with a disposable income of more than USD 5,000 per year (more than approximately Rs. 3,35,000 per year). The number of Indian middle class households is expected to increase from 5.36 Cr in CY2014 and reach 10.79 Cr households by 2019 implying a CAGR of 15.0 %. In addition, Mumbai and New Delhi are expected to have the 25th and 30th highest increase in household disposable income globally between 2013 and 2030. The tourism industry in India is fast-growing and an increasingly significant contributor to India’s economy, according to the CAPA Report. The total contribution of travel and tourism to India’s GDP was Rs. 7,642.5 billion in CY2014 which was 6.7 % of GDP and is forecast to rise by 7.3 % per annum to Rs. 16,587.2 billion which is 7.6 % of GDP by CY2025, according to the World Travel and Tourism Council. According to the Ministry of Tourism of India, India witnessed 7.7 million foreign tourist arrivals in CY2014, which had grown at a CAGR of 8.3 % during the period from CY2009 to CY2014. According to the EIU, the number of foreign tourist arrivals is expected to increase at a CAGR of 9.2 % during the period from CY2015 to CY2019 to reach 12.0 million in CY2019. This is due to, among other factors, government initiatives to promote India as a tourist destination, such as successful implementation of the e-Tourist Visa program for passport holders of 113 countries, as well as the government’s plan to make electronic visas available eventually to visitors from over 150 countries. India has a very large rail travel market in terms of passengers carried, and India’s domestic air travel market of 70 million passengers carried in FY2015 represents a very small percentage of the total rail passengers carried, according to the CAPA Report. While the size of the rail travel market is not indicative of the potential addressable market for air travel, and while only a portion of rail travel can reasonably be expected to be substituted by air travel in the near future, the substitution of rail travel by air travel presents a significant growth opportunity, according to the CAPA Report. Rising income levels are expected to cause the Indian middle class to increasingly prefer air travel to rail and road travel because of its convenience, shorter duration and competitive pricing, according to the CAPA Report. The Indian air travel market is serviced by domestic and international LCCs and full-service carriers (FSCs). Domestic carriers in India include LCCs such as IndiGo, SpiceJet, GoAir, Air India Express, and AirAsia India, as well as FSCs such as Jet Airways, Air India, Air Costa, Alliance Air and Vistara, according to the CAPA Report. These domestic carriers also compete with international and regional carriers, new entrants in the airline industry, Indian Railways, the state-owned railway company of India, and with different forms of road transportation, according to the CAPA Report. The competitive landscape of the Indian air travel market has undergone meaningful change as carriers have entered and exited the market and current carriers have undergone considerable changes, such as in their composition, market share, load factors, and cities served, according to the CAPA Report. It is expected that the growth to be driven by numerous factors like strong economic growth; continued population growth; expansion of the middle class; strong growth in tourism; rail travel substitution; increasing aircraft penetration from currently low penetration levels; expansion in aviation infrastructure; and an increasingly favourable regulatory environment. Looking at these InterGlobe Aviation Ltd is best placed to be benefited.
|SALES (₹ Crs)||13,925.30||16,140.00||20,800.00||27,340.00|
|NET PROFIT (₹ Cr)||1,304.20||2,000.00||2,270.00||2,720.00|
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