Indian Airlines Command Premium Globally Despite Pain
Shares of the Indian airlines have fallen 20-60 percent this year as lower fares, higher fuel prices and a weaker rupee took toll. Yet, they continue to trade at a premium to the global aviation benchmark.
Jet Airways Ltd., which reported a loss for the second consecutive quarter now trades at 52 times the 12-month forward enterprise value to Ebitda. That's nine times the valuation of the Bloomberg World Airline index, a weighted gauge of leading airline stocks in the world.
InterGlobe Aviation Ltd., operator of India’s largest airline IndiGo, trades at 9.8 times and SpiceJet at 7.4 times.
The premium if local carriers reflects India's position as the world's fastest-growing aviation market.