New Delhi: The past year has seen changes in the structure of the Indian aviation industry. My views on the sector remain jaundiced. Airline stocks are always disastrous for long-term investors. Very few airlines make money consistently due to extreme cyclicality.
However, precisely due to the cyclicality, it is sometimes an attractive short-term trading play. Stock prices can crash, recover and crash again in short sharp bursts of action. If the trader is on the right side of these moves, he can make quick money.
Aviation has suffered large losses in the past two years. Indigo is about the only profitable airline. Given high aviation turbine fuel (ATF) costs, poor infrastructure, high taxes and a demand recession, things aren't going to get better in a hurry. On the other hand, there has been a little consolidation due to the exit of Kingfisher. Other airlines managed to pick up market share as Kingfisher went into free fall.
Read news in full 15/09/13 Devangshu Datta/Business Standard
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