3 Popular Aviation Stocks to Invest in 2024

In recent years, India’s aviation sector has seen impressive growth. This is largely due to increasing disposable incomes and government efforts to improve infrastructure. Initiatives to attract foreign investment have also played a key role in the sector’s expansion. In combination, these factors have boosted air travel demand and led to significant industry development.

Today, India ranks as the third-largest domestic aviation market in the world. Thanks to supportive government policies, aviation stocks in India offer strong investment opportunities. Let’s check out the three popular aviation stocks (as per market capitalisation) and learn some factors you must consider before investing.

• InterGlobe Aviation holds a dominant 62% market share in India. It operates over 2,000 daily flights.

• SpiceJet connects remote areas by running several regional flights under the UDAN initiative. The airline operates 250 daily flights.

• Global Vectra Helicorp is India’s largest private helicopter company. It supports state governments and conducts specialised flights.

Globally, India's aviation industry is one of the fastest-growing. It only ranks behind China and the US. The sector was nationalised in 1953, and today, it covers both domestic and international airlines.

As per recent estimates, the market is expected to grow from $13.89 billion in 2024 to $26.08 billion by 2030, and that too, at an annual growth rate of 11.08%. Let’s see some key factors that are behind the aviation industry's growth:

• Rising household incomes

• The growth of low-cost airlines

• High foreign investments

• Expanding GDP

Moreover, both government and private companies are heavily investing in infrastructure to support this expansion. When it comes to economic impact, the aviation industry has created many jobs and contributes significantly to India’s economy.

India’s aviation sector is dominated by major players like InterGlobe Aviation (IndiGo) and SpiceJet. Additionally, Global Vectra Helicorp Limited (GVHL) is a market leader in the helicopter segment. For more clarity, let’s understand about the aviation stocks in detail:

1. InterGlobe Aviation

InterGlobe Aviation was founded in 2004. Currently, it is India's largest airline. The company runs operations under its brand “IndiGo”, which is known for offering affordable flights and punctual services. The airline has a large fleet of over 358 aircraft. They cover more than 118 destinations worldwide, including 86 within India and 32 international locations.

With over 2,000 daily flights, InterGlobe Aviation holds a 62% market share in India. Besides flights, it also provides additional services like:

• Vacation packages

• Ground handling

• In-flight catering

2. SpiceJet

SpiceJet is a low-cost airline in India known for making air travel affordable. It connects remote areas of the country and operates the highest number of UDAN flights. For the unaware, UDAN is a government initiative aimed at improving regional connectivity.

Moreover, SpiceJet operates around 250 daily flights to 48 destinations in India and abroad. Its fleet includes Boeing 737 Max, Boeing 700, Q400, and freighter aircraft. Apart from flights, the airline offers services like foreign exchange and travel assistance. It also has subsidiaries like SpiceJet Merchandise and Canvin Real Estate.

3. Global Vectra Helicorp

Global Vectra Helicorp Limited (GVHL) is India's largest private helicopter company. It has been providing professional helicopter services for over 24 years. The company offers:

• Onshore services for state governments

• Election flights

• Helicopter pilgrimages

• Other specialised operations.

GVHL operates from Juhu Airport in Mumbai, with sub-bases across India. It has a fleet of over 25 helicopters. The company also offers “aerial surveys” and provides support for industries like power, oil, and gas.

When investing in aviation stocks, you must evaluate several factors that influence a company’s financial performance and market position. Let’s check them out:

• How is the financial health of the company?

Start by analysing the company’s financial status. You can do so by checking the following:

• Revenue trends

• Profit margins

• Debt levels

• Cash flow stability

By evaluating these factors you can determine if the airline is financially sound and capable of handling market fluctuations. Also, these details provide insight into how the company is managing its finances.

• How strong is the market position?

Before investing, you must assess the competitiveness of the airline company. This can be done by checking the market share, which shows how much of the aviation market the company controls when compared to its competitors.

Ideally, choose an aviation stock with a higher market share as it suggests a stronger position in the industry. Also, compare its market share to rivals and check if the airline can withstand competition and grow over time.

• Is the economic environment supportive?

Be aware that the economic environment of India significantly influences the aviation industry. Key factors like GDP growth, inflation, and interest rates affect demand for air travel.

As per a thumb rule, more people can afford flights only in a growing economy. This boosts the industry and consequently the prices of aviation stocks. By understanding these factors, you can better predict the sector's performance and also precisely time your entry and exit.