Home/Blogs/Invest in the Aviation sector in 2024

Invest in the Aviation sector in 2024

stock market
28 Jun 20246 mins readBy MOFSL

The Indian aviation industry links people, cultures, and businesses. As of 2024, we cannot imagine a day without Flights. With India's economy on the rise and a rapidly expanding middle class, the demand for air travel is soaring. Airlines and flight business is here to stay and that's precisely why you must invest in this sector before it departs.

Over the past three years, India's civil aviation sector has become one of the nation's fastest-growing industries. It can be broadly divided into 3 segments:​​​​​​​

  1. Scheduled air transport services, which include both domestic and international airlines.

  2. Non-scheduled air transport services that include charter and air taxi operators.

  3. Air cargo services, which handle the transportation of goods and mail. Domestic flights make up about 69% of all airline traffic in South Asia, and India's airports are projected to manage 1 billion trips annually by 2023.

The Indian aviation industry has bounced back completely from the COVID-19 pandemic, as evidenced by air traffic reaching 327.28 million in FY23, up from 188.89 million in FY22.  India has now become the third-largest domestic aviation market globally and is on track to surpass the UK as the third-largest air passenger market by 2024.

Top companies in the aviation space

​​​​​​​

Interglobe Aviation Ltd (Indigo)

Interglobe Aviation Ltd, also known as IndiGo, is India’s largest passenger airline and operates as a low-cost carrier. IndiGo serves 86 destinations(24 international ones) and passengers a straightforward, unbundled product that lives up to its brand promise of "low fares, on-time flights.

Start Investing with Free Expert Advice!​​​​​​​​​​​​​​

The airline began operations in August 2006 with a single aircraft and has since expanded its fleet to 262 aircraft. IndiGo commands a 55% market share and ranks as the 6th largest carrier globally. In 2019, IndiGo also had a significant presence in the international market, accounting for approximately 12% of the total international seat capacity to and from India.

SpiceJet Ltd

SpiceJet Ltd provides air transport services for both passengers and cargo. SpiceJet is a low-cost airline that operates primarily within India. It operates the highest number of UDAN flights in the country, with approximately 250 daily flights to 48 domestic and international destinations. Its fleet includes Boeing 737 Max, Boeing 700, and Q400 aircraft.

In the domestic aviation industry, SpiceJet is the 5th largest player, and holds a market share of about 5.5% in CY23. The company has seen its market share decline from 10.5% in CY21, dropping from the 3rd to the 5th largest player. This decline is due to the grounding of around 40% of its fleet of 54 aircraft.

GMR Airports Infrastructure Ltd

GMR Airports Infrastructure Ltd is into the development, maintenance, and operation of airports. The company also engages in power generation, coal mining, highway development, maintenance and operation of special economic zones, and the construction business, including Engineering, Procurement, and Construction (EPC) contracting activities.

The airport sector accounts for 54.65% of its revenue in FY21. GMR is the second-largest private airport operator globally, with a 26% share of air traffic in India. GMR owns and operates Delhi International Airport and Hyderabad International Airport.

GMR is developing a greenfield airport in Mopa, North Goa, and an international greenfield airport in Bhogapuram, Vizianagaram, Andhra Pradesh.

GMR is the only Indian airport developer with operations outside India. It manages Mactan Cebu International Airport, the second-largest airport in the Philippines. The group has also been chosen to develop, operate, and manage the new international Kastelli airport in Greece.

Global Vectra Helicorp Ltd

GVHL is the largest private helicopter company in India, known for offering professional, safe, and accident-free services for over 20 years. Its operations include supporting India's offshore oil and gas industry, onshore operations for state governments (including VIP transportation), election flying, heli-pilgrimages, and other rotary services. 

GVHL is a pioneer in special aerial geophysical surveys and has recently expanded to provide support services to the power industry.

Conclusion

We live in a time when it is impossible to imagine a future without aeroplanes and helicopters. As the economy grows, the middle segment will also expand. This potential for massive growth will only increase the demand for flying and travel. Hence, if you invest in this sector today, you will see that investing in these companies was the right decision.

 

Financial Calculators: SWP Calculator | EMI Calculator | SIP Calculator | Compound Interest Calculator | CAGR Calculator | Sukanya Samriddhi Yojana Calculator | Retirement Calculator | Mutual Fund Returns Calculator | EPF Calculator

 

Popular Stocks: ICICI Bank Share Price | HDFC Bank Share Price | CDSL Share Price | UPL Share Price | TCS Share Price | BHEL Share Price | Trident Share Price | IRFC Share Price | Adani Power Share Price

 

Disclaimer: The stocks, companies, or financial instruments mentioned in this blog are for informational purposes only and should not be considered as investment recommendations. It is advised to consult with your financial advisor before making any investment decisions. Investment in securities markets are subject to market risks, read all the related documents carefully before investing. Investors are strongly encouraged to carefully read the risk disclosure documents prior to participating in market-related investments or trading activities. Due to the volatile nature of financial markets, no guarantees can be made regarding investment returns. Motilal Oswal Financial Services Ltd. does not offer any assured returns on market-linked securities. Please note that past performance of stocks or indices is not indicative of future results.
Open Demat Account
I wish to talk in South Indian language
By proceeding you’re agree to our T&C
Click here to see your activities