Nomura said the crash of Lion Air flight JT160 shortly after takeoff could deter passengers from air travel in the near-term, particularly in Indonesia and on flights operated by Lion Air.
The cause of the crash remains under investigation.
Nomua said that after the three air crashes in March 2014 through December 2014 — Malaysia Airlines’ flights MH370 and MH17 and Indonesia AirAsia’s flight QZ8501 — passenger growth slowed year-on-year, suggesting passenger growth, especially in Indonesia, could be at risk over the next three to six months.
It pointed to one caveat to that data: Three incidents within eight months may have prolonged the recovery in passenger figures.
But while it expected passenger growth to slow, Lion Air’s competitors across Indonesia, Malaysia and Thailand are likely to see a pick up in interest, allowing them to win market share, Nomura said in a note on Tuesday. Competitors set to benefit include Air Asia and Garuda, it said.
Competing carriers’ yields, or airfares measured on a per kilometer basis, could see a temporary boost as passengers will be more likely to accept higher fares, Nomura said, pointing to the historical data from 2014 and 2015.
Ailing carriers Garuda and Indonesia AirAsia have been losing market share to Lion Air in Indonesia, but after the crash, they may regain some lost ground, Nomura said.
In 2017, Lion Air’s market share was at 51 percent, Garuda’s at 33 percent and Indonesia AirAsia’s at 2 percent, according to CAPA and Indonesia DGAC data, Nomura said, adding that compared with Garuda’s market share of 38 percent in 2015 and AirAsia’s at 5 percent in 2007.
But it added: “note that all three; Garuda, Indonesia AirAsia, as well as Lion Air, were loss making over the past two years, and we estimate both Indonesia AirAsia and Garuda will remain in the red this year.”
In addition, Singapore Airlines, AirAsia Group’s Malaysia AirAsia and Thai AirAsia could also see more passengers, as Malindo and Thai Lion Air are partly owned and managed by Lion Group, Nomura said.
Lion Air operates Lion Air, Wings Air and Batik Air in Indonesia, Malindo in Malaysia and Thai Lion Air in Thailand, it noted.