Hey friends,
I wanted to know what are your views on the future of the Aviation Industry. The History has not be so great (in fact it has been horrible) for this sector with famous companies like Jet Airways (It is trying to revive) and Kingfisher going bankrupt.
My preliminary research pointed out few things which prove why this sector has performed poorly. Some of the reasons include 1. extremely low margins 2. heavy capex requirement 3. Volatility of Raw material prices and too many rules and regulations which makes it a perfect recipe of disaster.
But still, we see lot of investors showing interest in this sector ? like Rakesh JhunJhunwala is coming up with his own airline.
Is there something which is attractive in this sector that we are missing?
@Karthik @RahulKhanna and others who are into studying fundamentals pls share ur views on this
PS : Today is International Civil Aviation Day
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Never really understood this sector. Aviation stocks from whatever little I can tell haven’t really done much globally and in India as well. The only things that makes sense to me is to time these stocks, tactical trades if you will. Other than that, given how sensitive they are to input prices like crude, buying and holding doesn’t make sense to me.
This is so crazy. Looks like many of the indigo employees kept sick leave to attend the air india recruitment drive…
Craze of tatas but it was funny to see that many of the indigo’s flights were delayed because of this reason
TATA does hold lot of trust and value in Indian hearts.
We are seeing exponential growth in this space. I will not be surprised if this trend keeps on growing. 101 lakh → 10 crore approx.
This number, IMO can easily head to 20 crore per month easily in next 2 years if not bit early. Not sure if it translates to profits to aviation companies as there are lot of other factors involved (crude prices , competition(margin pressure) etc)
But, growth seems imminent considering the fact that lot of indians are now finding air transport affordable than earlier.
A AC 3 tier seat in Railways is still more comfortable and cheaper than an Economy class seat on a flight. Connectivity wise also Railway provides far better connectivity in Tier 2/3 cities than flights.
I feel majority of this growth in aviation is coming from Neo rich corporate employees who are working at 10/20/30 lpa packages in big cities like Delhi, Mumbai, Pune, Hyderabad, Bangalore etc
Time and convenience matters. You have 2 choice
-
Pre Book 3 tier AC for 1200 bucks for overnight 10 hour journey
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Prebook economy flight 1600 bucks for 2 hours journey (includes airport transfer + check-in+ 45mins flight).
Common sense would say choose option 2 because it’s just 400 extra and save 8 hours.
Jan Shatabdi, tatkal pricing sway people even more. No one would pay those cost for spending more time in train. That’s why aviation sector grows and people know that.
Additionally, trains gets delayed so much and tickets are not easy to get due to so many quotas.
This doesn’t happened much any more. I think passengers are compensated if there is delay. So from what I know most of the time the trains are on time. Last 1 year or so.
Other than this whatever else is mentioned I too agree.
See screenshots below
Cheapest flight on Lucknow -Delhi route on November 1 is costing ₹ 3500 approx and the costiest train for same route is costing ₹ 1100 approx. It’s not a matter of few hundred rupees.
Yes, trains take more time but we have to choose cost plus comfort vs speed.
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look at train timings. Its day train and graveyard time train. Nobody likes day train, your time & day is wasted. Day trains are no comfort, its boring as hell. Frequent travelers catch the evening or mostly night train even including travelers as nobody wants to lose a day.
Night trains are mostly full and railways get greedy and keep overcharging for tatkal.
As far as graveyard timing 12 to 3 am , not everyone prefers that. Firstly its night too dark and difficult to get to train station. Cabs and taxis charge lot, lack of public transportation and big security factor especially for girls. For a tourist its kinda tiresome, you don’t get proper sleep and probably tired the whole next day.
For flights its different, you get security. If you travelled with laptop and want to go to restroom are you gonna trust some random stranger on train or wear it & go to rest room. Plus chances of getting shoved and getting laptop damage is there. All of that is not there in flight. Any pending work or meeting, you can arrive early at airport , you can open laptop and comfortably work.