Aviation Sector Outlook - Supply Shortage To Continue To Aid Profitability: ICICI Securities

ICICI Securities Report

Manufacturing issues in engines/aircraft across original equipment manufacturers make for a tight aircraft market globally in CY23/CY24. With fresh issues being discussed in Boeing as well as Airbus, it is more than likely that recovery in aircraft supply will be delayed.

Empirically, the aircraft supply models have always underwhelmed in the past for India due to OEM issues (small reason) and weak airline balance sheets (major reason) leading to almost stagnant fleet of ~650-700 aircraft in India for the last four years.

Supply shortage should aid profitability and remains our investment thesis on InterGlobe Aviation Ltd. notwithstanding any seasonal weakness.

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