Why Accelya solutions is falling continuously? Is it the impact of high crude oil price lately? or any other news. or just bearish sentiment on election outcome. The results seemed to be OK but the price has gone below 900…
Results are down from previous Q
There are more fliers than ever before so why is the aviation sector stressed… Fantastic weekend read. Incisive case study on Indian aviation sector post Jet Airways fiasco.
Some highlights of the article
- Low fares in Aviation not rational as compared to airlines cost. Not sustainable in the long run. But companies do it to gain market share sacrificing viability. Passenger air traffic grew from 21 million in 1995 to 30 million by 2005, but it went four-fold from 30 million to 127 million by 2018
The aviation industry is a cyclical business with each cycle lasting about seven or eight years.
The successful airlines ensure they lose less during the bad times and make enough during the good times to cover up for the losses in the down-cycle
- Indigo did a bulk deal of Airbus A320 & hence got some real good discount, free maintenance contracts etc. All the aircrafts are standard so fuel cost remains predictable & under control. This bulk deal was the game changer for Indigo.
- Go Air has to ground some 10 odd aircraft due to engine issues.
- Low cost is a philosophy not a strategy which LCCs understood well…
5)ATF tax at 40% is highest in the world. Govt reluctant to do anything about it.
Indigo major market share benefeciary of Jet downfall, but cannot go beyond 50% due to antitrust issues. so its now looking at middle east markets.
6)Also saddled with a large debt of Rs. 575 billion, the state-owned Air India posted a loss of Rs.53 billion in FY18. No takers in recent bidding.