The stock market responded positively to the news of SpiceJet's growth. It is a tremendous growth opportunity for a small company. By right sizing flights (738) and a lower cost structure, I believe SpiceJet can make a profit where Jet didn't. Some of the routes should have been profitable for Jet:
Different POV. SpiceJet is being force-fed for potential winter hibernation. If Modi is not next PM, SpiceJet is toast. SG will face the same fate as 9W.
What SG trying to do is make itself relevant.
SpiceJet seems to be profitable now:https://m.moneycontrol.com/stock/SJ01/f ... /quarterly
Last quarter was a tough quarter yet they made money. If you mean by relevant is to increase economy of scale, I agree. Advertising is a fixed cost for a fleet of 20 or 200. So growing at an opportunity is key.
Jet's failure made this quarter and next quarter easy moneymakers. Then a set of traditionally profitable quarters. So I think SpiceJet is on the right track.
India needs more low cost transit. This is an opportunity to expand. There are suddenly 1,600 pilots, many 737 pilots, in need of work. Indigo botched their pilot quantity and will need six months to 9 months to recover. Who else will expand quickly? I hope GoAir (I'm a Pratt fan), AirAsia, and Vistara too.
I'm in R&D, so I'm trained to think long term. The MAX and NEO open up so much international expansion opportunities for SpiceJet and Indigo. Those two have the cost structure to expand. Indigo has the cash, but not the pilots. (Oops).
India has gone from over served to under served. I believe the market is about 8% under-served today. I also believe the market is growing 15% to 20%. So there is opportunity for profits. Airlines with low costs will sail through the next over-supplied timeframe. I predict that over-supplied condition is 15 to 24 months out (dependent on growth rates of India's economy as well as airlines).
So yes, POV. Now is the time to make hay.
Late edit:. Indigo was going to have 50% of their growth international in 2019. I wonder how Jet's failure impacts domestic vs. international growth. Obviously certain routes that were at their seat caps are key.
Does anyone have a list of the seats/week Jet abandoned? I'm only interested in capped markets.
It will be very interesting as to what EY does with the LHR slots that were Jet's.
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