I would have a cautious view on the future. This is not to indicate that I do not believe in the story of Indigo.
The following are the key merits that I see:
- The long runway in front of the airline companies( % of people who travel vs the population). Even if we discount the same for the people who cannot afford the same, it will still be a sizable number.
- As has been rightly pointed out, their cost of operations has been significantly lower than the other airlines( better negotiating power/ hands on approach of promoters etc)
- I have appreciated their focused approach (Limited types of carriers/ Limited routes - which helps them maximise their returns etc)
The area which I would be cautious about is the pace of growth and the Operational issues which arise. In my experience with the Industry, I have seen that despite an amazing opportunity, at times the top management needs to undergo a change in “vision”/ Mindset to embrace the next level of growth. I am sure that the promoters are quite smart and have thought about this!!