One company's pain is other company's gain

Go Air, which has 10% share among domestic airline companies has filed for voluntary insolvency due to losses and cash crunch.

Indigo, the leader is meanwhile up more than 2% on this news :joy:

Nevwr understood this business. I read most airlines fail. Wonder why. In india there is so much market demand and still airlines makes losses. Does indigo make money?

Is it the high jet fuel cost coupled with severe competition.

The airlines i know are
Indian airlines. Never trusted this airline for travel
Jet airways - was prompt and good but went bad
Sahara - think it got merger with jet
King fisher - travellers first choice but went under
Spice jet - travelled few times but heard its under losses
Vistara - only heard of them
Indigo - the only stable airlines i think

In a graveyard of competitors, Indigo has thrived - Low cost, On time, Hassle free experience and paid extra services. They also have low aircraft acquisition and maintenance cost due to bulk orders and largely single type of aircraft. For how long they lasted crisis after crisis, the management should get a :clap:

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We need telecom type duopoly in aviation. Bad for consumers but good for financial health of airlines.

You might get some answers from the below videos-

Why So Many Airlines are Going Bankrupt
How Airlines Quietly Became Banks
How Airlines Price Flights

How Budget Airlines Survive?
Why Ryanair Makes So Much Money
How Budget Airlines Work
How INDIGO AIRLINES became a MONOPOLY in Indian Aviation business : Monopoly series EP 3

Got some information of Airline business through this article. Great information for the un initiated in this sector.

I always tell those looking to start (or turn around) an airline: Multiply any capital requirement estimates made by consultants and pitch-makers by at least 3x, and the time required for break-even also by 3x.

For example, too often we find airlines enter engine or maintenance contracts with low “pay as you go” rates, only to get hammered when it comes to paying for the exclusions. It is like buying a low premium insurance policy that hits with a big bill at the time you actually need hospitalisation – penny-wise and pound-foolish.

(for example, counting the number of colour printouts daily and sending warning letters to staff who print in colour without permission – I am not making this up!), or on pursuing some types of ancillary revenues that hardly move the needle),

we must not dilute our ability to win the core revenue, which is “bums on seats” – people buying our tickets.


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Why so many failures?

The reasons Indian airlines fold vary, but it mostly boils down to a mix of dirt-cheap fares, high taxes on fuel and cut-throat competition, all recently compounded by the disruption from Covid. A one-way ticket for a 90-minut…

Read more at: Why airlines keep folding in India’s booming aviation market | Deccan Herald

Since 2020 atleast 64 airlines failed globally. The crisis in the aircraft industry is not limited to India. It’s such a capital intensive industry that a bolt from the blue like the covid induced lockdown is enough to take the life out of an airline business.