The recently-acquired two 737-800 aircraft have been integrated into Blue Dart Express’ existing aircraft network (the company realised revenue from these new aircraft only during the last 10 days of Q1FY24). This addition is expected to increase the company’s existing capacity by about 20 per cent from Q2.
Additionally, Blue Dart Express would add new routes to the current network of seven to eight major metropolitan areas, which would support volumes further. As a result, we anticipate improved margin performance from the second quarter onwards.
Blue Dart Express enjoys about 60 per cent market share in the organised Air Express segment (as of FY22) and has been gaining market share in the Surface Express segment (about 30 per cent of total revenue), which is expected to grow at twice the rate of air express industry. The company continues to focus aggressively on the surface express segment, which should support volume growth in the near to medium term.
With the upcoming festive season, improved utilisation of new aircraft and expansion of branch network, volumes are expected to register a CAGR of 13 per cent over FY23-25. We expect EBITDA margins to gradually improve to 13 per cent in FY25 with better capacity utilisation and reducing disparity between Brent and ATF prices.