On a lighter note, I understand that thumbnails are used to attract viewers, but the current thumbnail of this video seems to over-exaggerate the issue. The image of a burning Indigo plane, resembling a massive accident, feels a bit overstretched.
11% margin is not bad, almost all major international airlines have similar margins. Hedging against fuel prices will help Indigo in the short term. In the long term, as they are growing at a great pace, they should partner with any OMC or refineries like Delta Airlines of the USA. INDIGO will survive and sustain.
Click bait heading. more and more people are started taking flight with India growing 6-7% per year i don't see any compeling reason why Indigo end there service.
Indigo is a massively successful company. Good time to invest. These are only minor hiccups. People are freaking out when one quarter is slightly non profitable.
@@chaitanyasabharwal72003 they could have easily handled it by increasing the fares. But it looks looks indigo really cares about their customers in that front
Click bait heading. more and more people are started taking flight with India growing 6-7% per year i don't see any compeling reason why Indigo end there service.
Indigo’s continuous abuse of customers and consistent display of arrogance will lead to its demise,like me multiple other customers have boycotted indigo
The quarterly earnings is a reflection of what is to come for Indigo. Indigo, like any other business, became arrogant with it's success and fails in basic customer service. I mean - Basic. The queue management in check-in counters is worse than even a railway ticket counter. In-flight service? Lol, forget about it. You treat ur customer like they are at ur mercy - it's bound to blow back in your face soon. It will. Soon!
@ indigos management is wayyy better than the other airlines, their flights get hardly delayed, in air India mostly all flights are delayed and the queue at check in counter exists because it’s the largest airline India with 65 percent market share, that’s bound to happen. Check queues of other low cost carrier airlines in other countries and you’ll realise that indigo is still very much better. Indigo has never marketed themselves as a full service carrier airline like air India so expecting in flight service in indigo pretty much tells me how idiotic and entitled you are. Indigo has made losses because due to fluctuating fuel prices and aircraft groundings, something which you would’ve known had you been more aware about the industry instead of reacting to what people post on social media
First time ever, I felt that the video was incomplete, it felt as if it ended without a proper note. Ganesh & Team, you guys are trying to do too many things like PodCast, Hindi Channel, English Channel, Shorts, Instagram etc etc. Remember we give time for Value to this channel, if the value is gone, people like me might not be interested in upcoming videos. Hope to see the old team coming back with detailed analysis and indepth detailing.
@@HiteshRao-xc2qq This /profession/channel survives only on passing coments while drinking chai. If all like him start doing there own work what will this channel do ?
@naveenbharat2777 this channel is for education if you are a master in your own field then kindly create a new channel of your own if you are here to learn then learnnnn
From someone who researches aviation data globally as a hobby, and is an avid aviation geek, I'll say Indigo is doing a few things right to rectify its losses. First is the introduction of business class and expansion in international routes. Secondly, if you look at all the latest aircraft they have ordered, in the last 5 years, they have selected only GENX engines from General Electric and not gone for Pratt and Whitney, which will reduce the groundings as new aircraft join the fleet. Another thing to point is that out of 70 aircraft that are grounded, not all of them are due to the engine issue. Around 20+ aircraft are going through long-term maintenance schedule which takes about 1-2 months per aircraft to complete. Once the maintenance is complete, they will be operational again. So maybe the pressure will ease in the next 6-10 months and we will see them turning a profit again.
Do you work in a job related to aviation? How do you research the aviation data and what kind of data do you generally look? You seem like an interesting individual
Gist of the Video: 1. Challenges in the Aviation Industry: • Volatile fuel costs. • Grounded aircraft due to faulty engines. • Rising airport charges. 2. IndiGo’s Strategy: • Expanding operations beyond India. • Introducing customer loyalty rewards through the Blue Chip program. My Outlook: • Necessity of Aviation: In a country with 1.41 billion people, how will you travel abroad without flights? Ships aren’t a practical solution. • Growth Potential: If an aviation company can’t generate profit in a market where the industry has grown 100x in the last decade, where else can we expect growth? • Perspective on Problems: These issues are minor and will eventually be resolved, just like in any other industry. • Investment Opportunity: Aviation, despite its challenges, offers immense potential. Now is the right time to invest for the long term.
The Govt. should also ensure that costs such as fuel, landing fee, parking fee, CUTE fee don't shoot up. In short the Govt. should also assist pvt. airlines and keep a check on indirect expenses.
These fees are not in the government. After privatisation private players are enjoying that. Government only takes RNFC fees and ASF fees. RNFC goes to Air Navigation Services and ASF goes to organisation like BCAS and CISF.
The increase in costs mainly reflects the increase in fleet (especially depreciation and interest), their revenue is significantly low from June 24 qtr (drop of 2660 crs) where they posted healthy profits of 2804 crs. The main explanation regarding extreme drop in revenue in one quarter is missing....
@dhuryodhankaurav8487 I guess that is an old problem. Also, they have leased planes to make up for the short fall. They must have explained the drop in their analyst call, but then will have to go through the entire transcript of the same.
I felt this Video was not well researched or Not needed at this point. If you are short of content then don't post anything. But dont compromise with the value you have set. 🙏🙏
This video is a clever marketing from Indigo. It acheives three things. 1. Brand visibility (People are talking about it) 2. Sympathy (Resulting in more patronage. Given an option, people generally try to help someone who is weak) 3. Increase in ticket price without backlash (When people are shown that your favourite airline is sustaining losses, they might get ready to chip in few hundreds extra). At 11.5% Profit margin from 70000+Cr revenue, which stands at around 8000+Cr. Not a bad profit by any standard.
Indian aviation has an excellent potential to grow and it has been growing at a very optimistic pace. I have a few thoughts on this video. Privatisation of airport (especially if it involves crony capitalism) means higher service fee. Our protectionist bilateral air service agreements could ultimately hamper growth by artificially dimming competition and foreign investment. Even airports with catchment area of 20 million people or more have smaller runways and fewer aerobridges which means you can only operate smaller and fewer planes.
IMHO this problem is not crony capitalism, but a plainly unviable business model. A no-frill airport with a modest parking facility (and public transport connectivity with the city) would be financially sustainable. The major costs of any airport would be in air space management, ground management, and cargo handling. All the other facilities are frills, and everyone is forced to pay for it. What percentage of passengers would be willing to pay for the costs of an enormous parking lot, central A/C hall, high-tech washrooms, etc.? (If they were really affordable, why don't you see them in the city?)
Wait till Tata's $100B deal of 470 commercial Airplanes order is completed. People will remember Ratan Tata and thank him forever for what he did before leaving us😇
indigo almost has 1000 planes on order. considering aviation sector’s uncertainty we really predict much but from what we can see indigo is doing great job.
The oil prices increased but then it came down as well. So it should have offset some of the lost margin. Also, while the market is price sensitive, capacity is available only with Indigo so you need to book even if prices are increased and flight prices have already increased for flights from personal experience.
great video.. I am thankful that I tend to avoid airline industry from investing perspective.. but I really hope indigo survives.. I love and respect what the company has done for this country!
Ur video was simply forced, u failed to criticise the government on heavy aviation fuel taxes, incremental airport handling charges, unnecessary airport expansion at incremented cost, and failure in scrolling aircraft manufacturers for faulty engines. Above all, your selection of graphs during the first 2 minutes of the video was wrong. It should have been a time series graph, not a bar plot. Chao! -: Enthusiasm is contagious, only passionately curious and mostly clueless! :- 😝🤣😜
@deependughosh I'm An Aviation enthusiast. I'll point out a few things. ATF taxation is at par with other nations. We cannot compare with the USA, as they have domestic oil and gas production, which India lacks. Also, the Indian government's main earnings are from taxes. Now, let's come to your second point: incremental handling charges are needed as airports have to be profitable. Many airports charge more due to capacity constraints, which forces airlines to fight for slots and allows airports to charge more. This is linked to the third point you mentioned - unnecessary airport expansion. Well, right now India actually needs 200 operational airports to handle traffic effectively. Mumbai for example is running at full capacity and needs a new airport. The same goes with Chennai, Delhi and Ahmedabad. Remember that for all Indian airlines combined, the upcoming aircraft deliveries exceed an additional fleet of 1500 aircraft. Air India's 470 orders, Indigo's 500-600 orders, Akasa Air has an order of 200 aircraft, and Spicejet has around 150 aircraft on order. All these new planes need to be accommodated. Tier I and II cities need larger airports to balance traffic in a region. Coming to the 4th point, aircraft manufacturers are not at fault here. The issue lies with the American brand, Pratt and Whitney which is an engine manufacturer and separate from aircraft brands. Pratt and Whitney's new GTB engines are the problem and airlines around the world are facing the same issue of grounding. Now airlines within the USA like Delta, American Airlines, Spirit Airlines, etc. are also facing these groundings and filed cases against Pratt & Whitney, but the US government has not gone forward with them due to the brand being an American Military Contractor handling large defense orders, is protected by the US government. So expecting the Indian government or an Indian airline to file a case and proceed with it is impossible. This is also why Go First failed to go forward with its court case, and never got any compensation.
I just want to take time and appreciate your team's research and your presentation. Your videos are value dense, so I dont feel like a moment of my time is wasted when I binge watch them. I hope you guys find more and more success. I am an avid follower of your channel.Just wanna say thankyou!
Another well researched and presented analysis. Govt should decide whether the airline industry is an asset. If so get reduce the barriers the industry is facing. 1. Govt can help by dropping aviation fuel tariffs. 2. Airport’s are run by private operators. Govt shouldn’t seek rent and costs should be passed on to the customer. Bharat has a wage arbitrage that can enable the industry compete effectively with foreign carriers. As for Indigo is concerned, time to send Pieter Elder packing. Find a good Bharatiya CEO.
Few things we also need to keep in mind is their increased cost due to change in business ideation and exploring into a new genere. That includes ordering of new aircrafts, purchasing of bigger aircrafts, setting up training stations for the new aircrafts and also introducing business class make over to their aircrafts. These are pretty costly affairs which I think is also a major reason for their loss booking in this financial year which may carry on for few years. But if things go right, the books may change in the future.
Airport Charges keep increasing because of the way airports are built in India these days. They are built like huge palaces to incur huge operational costs. It's so hard to navigate through an Airport in India, they are built like a maze.
Hi Ganesh it was nice to meet you few days ago..initially I was hesitant to approach you, but when i said hi and then we talked for 5 minutes discussed about the business and few more things..Best of luck to you and your team
0.13% Indian population, against 0.51% of Chinese, is customer of aviation. So, if the per capita income increases, there still lies a great scope of profit in this industry.
No one in India seems to care about fuel prices and taxes. As an F&O trader, I understand the pain all too well. It’s incredibly challenging to make money from the stock market, and on top of that, the government is extracting significant amounts through taxes. While I understand that taxes are essential for our economic growth, the new SEBI rules and taxation policies are making it clear just how much we're being taxed. Even government supporters are facing these issues-turning a blind eye won't make them disappear. #nothing_they_do_for_common_man...!
Thanks for the video. Truly appreciate your research depth and rich content! You are doing a great service to the people of India who care for the nation and keen to understand more about our growth story.🙏
Airlines always hedge their exposure to volatile prices by getting into futures contract so that they have some predictability. Not sure, if such a contract was there or not in Indigo's case. But that is again capped to some barrels per month, so the exposure is limited to over the cap barrels, that can be one of the reasons!
A big part of losses has come due to grounding issues, similar to those of Go First. See when a plane is grounded, its not making you any revenue but is does cost a lot to keep a plane grounded with costs ranging from parking fees to maintenance fees and given the post covid supply chain disruptions, it is taking painfully long times for engine manufacturers to deliver repaired engines in time.
@@Nnss-yb6vb airlines runs with razor thin margins all across the globe and that not an issue.All modes of transports are being subsidized one way or the other by the govt whether its bullet in china or normal trains in india all run at a deficit. The issue is government was running airports then they decided to privatise them which is great but there were some rules for privatising them like companies which already ran airports can only bid and no company can bid for more then 2 airports but government then govt withdrew these conditions and gave airport to Adani which didn’t fit any conditions then what Adani does is he creates a monopoly and jack up the price
@@Naruto-Uchiha724 @Naruto-Uchiha724 I partially agree with your opinion If adani is creating a monopoly it should be changed But this airline issue is not because of adani Because he only owns 8 airports We have 24 international and 103 domestic airports The main issue is brother The number of customers are low Most of the middle class uses Train and Only thing Adani can increase is airport fee when he does It reflects on the price of every airline tickets And indigo is not hedging against fuel prices If we take Europe most of the people use airlines instead of train But when it comes india it is opposite Only upper middle class use airlines For frequent travels Only diversified conglomerate can survive in airline business In China most of the people use train Number of Chinese airlines are less in China And they mostly use it for international travels only
Your videos are really good. I understand Indian airlines are struggling. But how the other country airlines like Singapore, Emirates, Qatar airlines are beating the expectations and becoming the best and top airlines. What strategy they are following to make success. Please can you make a video on how Singapore airlines has become so successful.
Bro, it is just a business. ups and downs are a part of it. Indigo is not going down. Fuel cost is a big factor. Wait till January. Next 5 years are the golden years for INDIGO.
Could you please make a case study on other Airlines which are on the top worldwide. What makes them standout and stay strong during these volatile times compared to Indigo.
Indigo born in the blood of AIR INDIA, during the UPA tenure AIR INDIA flights are delayed/cancelled to allow indigo to come up in the market. Now AIR INDIA is back in track with new management under TATA and giving tough competition to other airlines. Even though Qatar Airways has a massive investment in Indigo so its very hard to believe it will bankrupt.
In my opinion due to recent leadership change which then led to decision of buying aircrafts instead of leasing them was a terrible mistake. This decision has caused IndiGo to bleed a lot of capital which led to losses this quarter. I wonder why you didn't mention these things in your video.
Reasons for the loss in Indigo- 1. Rise in ATF cost 2. P&W Engine issue 3. ACMI lease issue. Since planes were grounded due to Engine supply delay. So Costs increased 4. Maintenance of Aircraft repairs & other costs like "Airport charges" have increased by 41% Solution:- 1. Shifting target to high value customer 2. Focusing more on International services, which gives more profit margins 3. BluChip Loyalty Program Way forward:- 1. Indian Domestic aviation demand growth rate= 13.5% Indian Overseas aviation demand growth rate= 22.3%(66 million passagers growth) 3 challenges:- 1. Need to increase the number of Airports 2. Increase the per capita income of India 3. Govt support the industry via Ease of doing business(govt can reduce the Airport costs)
Taxes on aviation fuel could be altered by a mechanism in order to reduce the volatality.. airport fees which are pretty high could be fixed for some period of time ( say 5 years).. most important point is not to sell all the airports to adani ji who becomes monopoly and fix the prices
BTW if anyone wonders the flight rates are very much comparable in India and USA. So a 2:30HR flight from Delhi to Hyderabad costs avg 4000INR while similar 2:30 HR flight from new york to Chicago flight costs most of the times less than that. I dont know how US operators manage to keep price so low while paying almost double in salary and labour.
Grounded airplanes issue could be temporary thus the loss in revenue and profits, Indigo will recover from here but to boost the sector overall, Govt should also consider reducing aiport fees or atleast subsidize it based on the scale of operations of the airline company i.e. more aircrafts more discount. Aiports might increase their revenue from restuarants and other businesses but honestly, those are highly expensive anyway and if you are smart you will use a credit card at a lounge. This will aid in cutting down some of the operational expenses for the company thus helping customers in long term as the airline will most likely keep the prices at same level.
No one had a bigger impact on Indian aviation than Shri Captain Gopinath. Others come and go ..but that rs 500 ticket and the challenges he had…bonkers!
Pratt and Whitney has brought a new Geared Fan technology in the Aero Engine market. Hope the issues will settle down soon. Also they are said to be compensating heavily for the groundings.
Say what u want, Indigo is the undisputed champion of aviation, no other airlines in the world has ever shown such a tremendous growth, from 0 to 400 aircrafts in 18 years has never been seen before in the world, wait for 18 more years and indigo will be in the top 3 in the world.. whatever the problem indigo has they will come out of it with flying colours..
The sudden increase in expenses and severe drop in loss needs further analysis. The oil prices have remained stable, as have taxation. So why this sudden increase in costs? Are they cleaning their balance sheets by writing off bad debts or has interest costs have gone up or have they offered steep discounts in profitable routes? The issue related to Pratt and Whitney engines is there for a long time - so why the impact now?
Privatising the airports of India is what is leading to the price increases customers must pay. Pls make another video on profitability of Indian airports
I hope Airplane manufacturer companies soon start manufacturing Electrict, Hydrogen and other ways to support airline companies make profit and survive and grow faster.
Indigo is emotion🥹🥹 way back in early 2000 the only carrier which could take a longing middle class biharan( part of the IT force) to Patna from Bangalore for the Annual Chahtt festival and family reunion in around 3 hours in affordable middle class prices - the train use to take 50 +damn hours and leaves were few !! As much as I believe Indigo will survive this the middle class has to open its eyes to the fact of increasing prices of aviation and the after-effect of almost Adaani monopoly in the aviation development sector and Ambani’s in petroleum !! #JaagoGraahakJaago
Adani baba offering higher footfall cost to govt in airport contracts is a big reason for this. Passing on the cost to airlines and ultimately to customer
Question: Will it be beneficial for airlines to use derivatives contracts like Futures and Options for fuel to offset the volatility of oil since the expenditure for fuel could be calculated in advance? ❤
Hi think school team, I have the following suggestion for you- 1. While the reasons for losses are clear but it isn't clear from your video as to what would be the course correction steps for indigo to make. While high fuel costs is something everyone knows, grounding of planes is also something many are aware of but if you could add some insights on what possibly could indigo do. That would be real insight to views because the reasons for losses are pretty much first known.
Its also the curse of Indigo employees present and former for treating us like animals with no respect. Anyone who disagrees is the ones who were soap to the managers who were trying to act like team leads.
Airports need to reduce their fees. The govt has to put a cap on this and maybe also partly subsidise with travel related taxes, to let airlines be profitable or it could be a very discouraging industry for investors and will slow down growth.
I don't think it is a major issue for indigo .If you keep the fuel prices aside the grounded planes should return back to service and eventually fleet will be back to full strength .And eventually their economies of scale will cover the losses .
Really appreciate your efforts. I have a question - Why did the airport charges increase by ~41%? Is it a one-off instance? Did it increase for all other airlines as well?
something felt off in this video, it didnt give that knowledge coming vibe. felt same with some earlier videos too. hoping coming videos bring back that magic
@ThinkSchool - Excellent analysis. You could have refrained from the clickbait title though! The challenges are industry wide and if IndiGo collapses, it will be similar to SBI going bankrupt. Our aviation sector cannot afford it. Unless of course, IndiGo does something horribly wrong ,that is
After Naresh Goyal's Jet Airways it's Indigo now. Happy to know that this airlines will go bankrupt. One of the worst crew they have and I missed my luggage a few years back while traveling from Chennai to Delhi. The response from the crew was pathetic.
Despite the ACMI, Indigo seems to be having a large-scale problem with its aircraft. The Bengaluru airport is littered with Indigo planes without engines. Indigo must be facing a huge parking fee for these permanently parked (abandoned?) aircraft!
@@SanskarDodya That may not be the whole picture. There are other losses like lost air routes, penalties for not servicing a route, penalty for failing to arrive on-time (because of depleted fleet), etc. Not to mention that the airline cedes space to competition and lost customer loyalty because of canceled/delayed flights. If compensation could save the airline, why did Go First fold up?
Check out Odoo’s expense management tool: www.odoo.com/r/OCEs
main itna Achcha Gata hun lekin Koi Nahin Sunta😭😭😭😓😖jnu
Does indigo need to pay lease amount for faulty air plan as 100 plan are grounded why. Don't they return the plane and cancel lease
@@ThinkSchool take odoo and shove it
On a lighter note, I understand that thumbnails are used to attract viewers, but the current thumbnail of this video seems to over-exaggerate the issue. The image of a burning Indigo plane, resembling a massive accident, feels a bit overstretched.
Absolutely.
Clickbait 😂😂😂
They always do that, cheap channels used to do that but even trustworthy channels are doing it.
Yeah feels cheap
@@PranavPradi it depends on mindset
11% margin is not bad, almost all major international airlines have similar margins. Hedging against fuel prices will help Indigo in the short term. In the long term, as they are growing at a great pace, they should partner with any OMC or refineries like Delta Airlines of the USA. INDIGO will survive and sustain.
Click bait heading. more and more people are started taking flight with India growing 6-7% per year i don't see any compeling reason why Indigo end there service.
Indigo is a massively successful company. Good time to invest. These are only minor hiccups. People are freaking out when one quarter is slightly non profitable.
Certainly not minor hiccups but yeah they could be dealt relatively easily... And absolutely, I too feel Indigo stock has a good value today.
@@chaitanyasabharwal72003 they could have easily handled it by increasing the fares. But it looks looks indigo really cares about their customers in that front
Click bait heading. more and more people are started taking flight with India growing 6-7% per year i don't see any compeling reason why Indigo end there service.
bro has indigo stock
Indigo’s continuous abuse of customers and consistent display of arrogance will lead to its demise,like me multiple other customers have boycotted indigo
This is baseless
What's the alternative 😢?
I agree with this
Bro it’s only possible when u have options. Indigo is operating at many small cities where others can’t.
Horrible take, it’s mainly due to aircraft groundings and fuel prices fluctuating
Wah wah, indigo case study completely in blue - from tshirt to pie charts 😂
Even the metro station outside Indigo office is marked with Indigo Standard Time (IST) 😂
One quarter made in loss and videos like this come out, indigo has the money to stay afloat and sort out their problems for a long long time
What financial to check ? Cash in hand?
oil 250 what happens to quarter ??
And look at that thumbnail!
Total clowns!😂😂
The quarterly earnings is a reflection of what is to come for Indigo. Indigo, like any other business, became arrogant with it's success and fails in basic customer service. I mean - Basic. The queue management in check-in counters is worse than even a railway ticket counter. In-flight service? Lol, forget about it. You treat ur customer like they are at ur mercy - it's bound to blow back in your face soon. It will. Soon!
@ indigos management is wayyy better than the other airlines, their flights get hardly delayed, in air India mostly all flights are delayed and the queue at check in counter exists because it’s the largest airline India with 65 percent market share, that’s bound to happen. Check queues of other low cost carrier airlines in other countries and you’ll realise that indigo is still very much better. Indigo has never marketed themselves as a full service carrier airline like air India so expecting in flight service in indigo pretty much tells me how idiotic and entitled you are. Indigo has made losses because due to fluctuating fuel prices and aircraft groundings, something which you would’ve known had you been more aware about the industry instead of reacting to what people post on social media
First time ever, I felt that the video was incomplete, it felt as if it ended without a proper note. Ganesh & Team, you guys are trying to do too many things like PodCast, Hindi Channel, English Channel, Shorts, Instagram etc etc.
Remember we give time for Value to this channel, if the value is gone, people like me might not be interested in upcoming videos.
Hope to see the old team coming back with detailed analysis and indepth detailing.
😂 Drinking chai and passing comments is easy isn't it ? So let's concentrate on your work rather then passing comments on hard work .
true. //Is this the End of Indigo’s Dream run?// clickbait title. but he talked about financials, etc. nowhere close to the title.
@@HiteshRao-xc2qq This /profession/channel survives only on passing coments while drinking chai. If all like him start doing there own work what will this channel do ?
@naveenbharat2777 this channel is for education if you are a master in your own field then kindly create a new channel of your own if you are here to learn then learnnnn
@@HiteshRao-xc2qq then tell them to disable the comments.
From someone who researches aviation data globally as a hobby, and is an avid aviation geek, I'll say Indigo is doing a few things right to rectify its losses. First is the introduction of business class and expansion in international routes. Secondly, if you look at all the latest aircraft they have ordered, in the last 5 years, they have selected only GENX engines from General Electric and not gone for Pratt and Whitney, which will reduce the groundings as new aircraft join the fleet. Another thing to point is that out of 70 aircraft that are grounded, not all of them are due to the engine issue. Around 20+ aircraft are going through long-term maintenance schedule which takes about 1-2 months per aircraft to complete. Once the maintenance is complete, they will be operational again. So maybe the pressure will ease in the next 6-10 months and we will see them turning a profit again.
Do you work in a job related to aviation? How do you research the aviation data and what kind of data do you generally look?
You seem like an interesting individual
Someone said correctly that,
If you want to become a millionaire then start an aviation company.
( condition:- you should already be a billionaire)
😂
Richard Brandson
Then my friend read about Deccan airline
@@unfilteredayush these are specifically for indian market
Warren buffer said that
Gist of the Video:
1. Challenges in the Aviation Industry:
• Volatile fuel costs.
• Grounded aircraft due to faulty engines.
• Rising airport charges.
2. IndiGo’s Strategy:
• Expanding operations beyond India.
• Introducing customer loyalty rewards through the Blue Chip program.
My Outlook:
• Necessity of Aviation: In a country with 1.41 billion people, how will you travel abroad without flights? Ships aren’t a practical solution.
• Growth Potential: If an aviation company can’t generate profit in a market where the industry has grown 100x in the last decade, where else can we expect growth?
• Perspective on Problems: These issues are minor and will eventually be resolved, just like in any other industry.
• Investment Opportunity: Aviation, despite its challenges, offers immense potential. Now is the right time to invest for the long term.
The Govt. should also ensure that costs such as fuel, landing fee, parking fee, CUTE fee don't shoot up. In short the Govt. should also assist pvt. airlines and keep a check on indirect expenses.
These fees are not in the government. After privatisation private players are enjoying that. Government only takes RNFC fees and ASF fees. RNFC goes to Air Navigation Services and ASF goes to organisation like BCAS and CISF.
Government cares only about its pocket and no one else
The increase in costs mainly reflects the increase in fleet (especially depreciation and interest), their revenue is significantly low from June 24 qtr (drop of 2660 crs) where they posted healthy profits of 2804 crs. The main explanation regarding extreme drop in revenue in one quarter is missing....
Were the planes grounded more in this quarter?
@dhuryodhankaurav8487 I guess that is an old problem. Also, they have leased planes to make up for the short fall. They must have explained the drop in their analyst call, but then will have to go through the entire transcript of the same.
Your commitment to the blue team is noted. Absolutely fantastic editing.
Blue team = Indigo?
@@may21136no, Republican.
@@may21136yes.
I felt this Video was not well researched or Not needed at this point. If you are short of content then don't post anything. But dont compromise with the value you have set. 🙏🙏
This video is a clever marketing from Indigo. It acheives three things.
1. Brand visibility (People are talking about it)
2. Sympathy (Resulting in more patronage. Given an option, people generally try to help someone who is weak)
3. Increase in ticket price without backlash (When people are shown that your favourite airline is sustaining losses, they might get ready to chip in few hundreds extra).
At 11.5% Profit margin from 70000+Cr revenue, which stands at around 8000+Cr. Not a bad profit by any standard.
Indigo is a Robust brand and ruled indian aviation industry from long time
Hope it will sail through small storms ❤
Indian aviation has an excellent potential to grow and it has been growing at a very optimistic pace. I have a few thoughts on this video. Privatisation of airport (especially if it involves crony capitalism) means higher service fee. Our protectionist bilateral air service agreements could ultimately hamper growth by artificially dimming competition and foreign investment. Even airports with catchment area of 20 million people or more have smaller runways and fewer aerobridges which means you can only operate smaller and fewer planes.
IMHO this problem is not crony capitalism, but a plainly unviable business model.
A no-frill airport with a modest parking facility (and public transport connectivity with the city) would be financially sustainable.
The major costs of any airport would be in air space management, ground management, and cargo handling.
All the other facilities are frills, and everyone is forced to pay for it.
What percentage of passengers would be willing to pay for the costs of an enormous parking lot, central A/C hall, high-tech washrooms, etc.?
(If they were really affordable, why don't you see them in the city?)
True@@nagesharas5136
Wait till Tata's $100B deal of 470 commercial Airplanes order is completed. People will remember Ratan Tata and thank him forever for what he did before leaving us😇
indigo almost has 1000 planes on order. considering aviation sector’s uncertainty we really predict much but from what we can see indigo is doing great job.
To you think Ratan Tata made the deal? He left the chairmanship way before, Tata suna to ek hi bande ka face yaad ata hain kya chomu
Tata's already failed in airlines.
Tata's are no exception when it comes to airlines
@ yes, they also started predatory practices to loot people, what’s the point of them being run by charity if ultimately they want to loot people
Rich branson said ~ If you want to be millionaire start with billion dollars and launch a new airline. That's definitely true in India.
00:05 Indigo faces unprecedented losses amid a struggling aviation market.
02:00 IndiGo Airlines faces significant financial losses indicating challenges in Indian aviation.
03:58 Indigo faces challenges despite solid metrics in airline business.
05:52 Indigo faces challenges despite strong performance due to volatile fuel costs.
07:40 Indigo Airlines faces profit challenges due to rising costs and operational issues.
09:36 Indigo faces massive revenue losses due to increased costs and grounded aircraft.
11:32 Indigo is adapting to market challenges with strategic growth initiatives.
13:13 India's aviation market growth faces significant challenges despite its size.
The oil prices increased but then it came down as well. So it should have offset some of the lost margin. Also, while the market is price sensitive, capacity is available only with Indigo so you need to book even if prices are increased and flight prices have already increased for flights from personal experience.
great video.. I am thankful that I tend to avoid airline industry from investing perspective.. but I really hope indigo survives.. I love and respect what the company has done for this country!
Ur video was simply forced, u failed to criticise the government on heavy aviation fuel taxes, incremental airport handling charges, unnecessary airport expansion at incremented cost, and failure in scrolling aircraft manufacturers for faulty engines. Above all, your selection of graphs during the first 2 minutes of the video was wrong. It should have been a time series graph, not a bar plot. Chao!
-: Enthusiasm is contagious, only passionately curious and mostly clueless! :- 😝🤣😜
Ig he has mentioned the fees
Can u explain the issue wrt bar vs time series plot
Adani is building major aurports so price to badne hi h
Things can't be for free...
“Heavy aviation fuel taxes , incremental airport handling charges , unnecessary airport expansion & failure in scrolling aircraft manufacturers for faulty engines?!” 🤡😂
@deependughosh I'm An Aviation enthusiast. I'll point out a few things. ATF taxation is at par with other nations. We cannot compare with the USA, as they have domestic oil and gas production, which India lacks. Also, the Indian government's main earnings are from taxes. Now, let's come to your second point: incremental handling charges are needed as airports have to be profitable. Many airports charge more due to capacity constraints, which forces airlines to fight for slots and allows airports to charge more. This is linked to the third point you mentioned - unnecessary airport expansion. Well, right now India actually needs 200 operational airports to handle traffic effectively. Mumbai for example is running at full capacity and needs a new airport. The same goes with Chennai, Delhi and Ahmedabad. Remember that for all Indian airlines combined, the upcoming aircraft deliveries exceed an additional fleet of 1500 aircraft. Air India's 470 orders, Indigo's 500-600 orders, Akasa Air has an order of 200 aircraft, and Spicejet has around 150 aircraft on order. All these new planes need to be accommodated. Tier I and II cities need larger airports to balance traffic in a region. Coming to the 4th point, aircraft manufacturers are not at fault here. The issue lies with the American brand, Pratt and Whitney which is an engine manufacturer and separate from aircraft brands. Pratt and Whitney's new GTB engines are the problem and airlines around the world are facing the same issue of grounding. Now airlines within the USA like Delta, American Airlines, Spirit Airlines, etc. are also facing these groundings and filed cases against Pratt & Whitney, but the US government has not gone forward with them due to the brand being an American Military Contractor handling large defense orders, is protected by the US government. So expecting the Indian government or an Indian airline to file a case and proceed with it is impossible. This is also why Go First failed to go forward with its court case, and never got any compensation.
I just want to take time and appreciate your team's research and your presentation. Your videos are value dense, so I dont feel like a moment of my time is wasted when I binge watch them. I hope you guys find more and more success. I am an avid follower of your channel.Just wanna say thankyou!
Indigo is not a budget airlines, it was their smart move to tag themselves so. Most of the days, they are equal to Vistara or any other airline
Another well researched and presented analysis.
Govt should decide whether the airline industry is an asset. If so get reduce the barriers the industry is facing.
1. Govt can help by dropping aviation fuel tariffs.
2. Airport’s are run by private operators. Govt shouldn’t seek rent and costs should be passed on to the customer.
Bharat has a wage arbitrage that can enable the industry compete effectively with foreign carriers.
As for Indigo is concerned, time to send Pieter Elder packing. Find a good Bharatiya CEO.
Content starts t 6:00
Such a clickbait title and thumbnail, Ganesh. You guys are over-exaggerating the situation.
Few things we also need to keep in mind is their increased cost due to change in business ideation and exploring into a new genere.
That includes ordering of new aircrafts, purchasing of bigger aircrafts, setting up training stations for the new aircrafts and also introducing business class make over to their aircrafts. These are pretty costly affairs which I think is also a major reason for their loss booking in this financial year which may carry on for few years. But if things go right, the books may change in the future.
Airport Charges keep increasing because of the way airports are built in India these days. They are built like huge palaces to incur huge operational costs. It's so hard to navigate through an Airport in India, they are built like a maze.
Hi Ganesh it was nice to meet you few days ago..initially I was hesitant to approach you, but when i said hi and then we talked for 5 minutes discussed about the business and few more things..Best of luck to you and your team
0.13% Indian population, against 0.51% of Chinese, is customer of aviation.
So, if the per capita income increases, there still lies a great scope of profit in this industry.
No one in India seems to care about fuel prices and taxes. As an F&O trader, I understand the pain all too well. It’s incredibly challenging to make money from the stock market, and on top of that, the government is extracting significant amounts through taxes.
While I understand that taxes are essential for our economic growth, the new SEBI rules and taxation policies are making it clear just how much we're being taxed. Even government supporters are facing these issues-turning a blind eye won't make them disappear.
#nothing_they_do_for_common_man...!
Impressed with the detailed research and valuable information 🤝
Thanks for the video. Truly appreciate your research depth and rich content! You are doing a great service to the people of India who care for the nation and keen to understand more about our growth story.🙏
Airlines always hedge their exposure to volatile prices by getting into futures contract so that they have some predictability. Not sure, if such a contract was there or not in Indigo's case. But that is again capped to some barrels per month, so the exposure is limited to over the cap barrels, that can be one of the reasons!
A big part of losses has come due to grounding issues, similar to those of Go First. See when a plane is grounded, its not making you any revenue but is does cost a lot to keep a plane grounded with costs ranging from parking fees to maintenance fees and given the post covid supply chain disruptions, it is taking painfully long times for engine manufacturers to deliver repaired engines in time.
Absolutely great animation, graphic and editing
So obvious, Because Adani owns those Airports 11:07
Create a monopoly and jack up the prices is all he knows
Nope airline has thin margin
You can check us ,they have also the same problem
China mostly use railway
What we need is best railway system
@@Nnss-yb6vb airlines runs with razor thin margins all across the globe and that not an issue.All modes of transports are being subsidized one way or the other by the govt whether its bullet in china or normal trains in india all run at a deficit. The issue is government was running airports then they decided to privatise them which is great but there were some rules for privatising them like companies which already ran airports can only bid and no company can bid for more then 2 airports but government then govt withdrew these conditions and gave airport to Adani which didn’t fit any conditions then what Adani does is he creates a monopoly and jack up the price
@@Naruto-Uchiha724 @Naruto-Uchiha724 I partially agree with your opinion
If adani is creating a monopoly it should be changed
But this airline issue is not because of adani
Because he only owns 8 airports
We have 24 international and 103 domestic airports
The main issue is brother
The number of customers are low
Most of the middle class uses
Train and
Only thing Adani can increase is airport fee when he does
It reflects on the price of every airline tickets
And indigo is not hedging against fuel prices
If we take Europe most of the people use airlines instead of train
But when it comes india it is opposite
Only upper middle class use airlines
For frequent travels
Only diversified conglomerate can survive in airline business
In China most of the people use train
Number of Chinese airlines are less in China
And they mostly use it for international travels only
Your videos are really good. I understand Indian airlines are struggling. But how the other country airlines like Singapore, Emirates, Qatar airlines are beating the expectations and becoming the best and top airlines. What strategy they are following to make success. Please can you make a video on how Singapore airlines has become so successful.
Hats off bro what a unprecedented explanation about the largest aviation industry in india❤❤❤❤
Bro, it is just a business. ups and downs are a part of it. Indigo is not going down.
Fuel cost is a big factor. Wait till January. Next 5 years are the golden years for INDIGO.
Great content, greater delivery and even better structure ❤
Could you please make a case study on other Airlines which are on the top worldwide. What makes them standout and stay strong during these volatile times compared to Indigo.
*Wow! Mind blowing presentation. Top Notch 👌👌👌*
Indigo born in the blood of AIR INDIA, during the UPA tenure AIR INDIA flights are delayed/cancelled to allow indigo to come up in the market. Now AIR INDIA is back in track with new management under TATA and giving tough competition to other airlines. Even though Qatar Airways has a massive investment in Indigo so its very hard to believe it will bankrupt.
Thank you once again Ganesh and team 🤟🏼🌹❤️❤️
Superb presentation. Supported by facts and figures. Well analysed too !
In my opinion due to recent leadership change which then led to decision of buying aircrafts instead of leasing them was a terrible mistake. This decision has caused IndiGo to bleed a lot of capital which led to losses this quarter.
I wonder why you didn't mention these things in your video.
I would say your graphics of the video was great and very engaging ❤
Hope the company come back strong. They've given decent service at reasonable cost.
Reasons for the loss in Indigo-
1. Rise in ATF cost
2. P&W Engine issue
3. ACMI lease issue. Since planes were grounded due to Engine supply delay. So Costs increased
4. Maintenance of Aircraft repairs & other costs like "Airport charges" have increased by 41%
Solution:-
1. Shifting target to high value customer
2. Focusing more on International services, which gives more profit margins
3. BluChip Loyalty Program
Way forward:-
1. Indian Domestic aviation demand growth rate= 13.5%
Indian Overseas aviation demand growth rate= 22.3%(66 million passagers growth)
3 challenges:-
1. Need to increase the number of Airports
2. Increase the per capita income of India
3. Govt support the industry via Ease of doing business(govt can reduce the Airport costs)
Taxes on aviation fuel could be altered by a mechanism in order to reduce the volatality..
airport fees which are pretty high could be fixed for some period of time ( say 5 years)..
most important point is not to sell all the airports to adani ji who becomes monopoly and fix the prices
Ima get lot of heat for this but truth be told. Majority of Indians are not ready for flying.
Modani will come up with a airlines after capturing all major airports of India
BTW if anyone wonders the flight rates are very much comparable in India and USA.
So a 2:30HR flight from Delhi to Hyderabad costs avg 4000INR while similar 2:30 HR flight from new york to Chicago flight costs most of the times less than that.
I dont know how US operators manage to keep price so low while paying almost double in salary and labour.
Grounded airplanes issue could be temporary thus the loss in revenue and profits, Indigo will recover from here but to boost the sector overall, Govt should also consider reducing aiport fees or atleast subsidize it based on the scale of operations of the airline company i.e. more aircrafts more discount. Aiports might increase their revenue from restuarants and other businesses but honestly, those are highly expensive anyway and if you are smart you will use a credit card at a lounge. This will aid in cutting down some of the operational expenses for the company thus helping customers in long term as the airline will most likely keep the prices at same level.
These costs were increasing in past as well, but when Mr Aditya Ghosh left the cost controls and checks & balances in the company were lost.
How do you come up with the animations for these videos. Simply amazing. Would love to get some information on that.
Would it be possible for indigo to invest in oil futures to hedge against fluctuating prices…. Just thinking out loud
watta nice case analysis bro !!
Great research and presentation. Keep up the good work!
😮 thanks for the valuable information sharing with us ❤
Super content Ganesh!! Loved it😊
No one had a bigger impact on Indian aviation than Shri Captain Gopinath. Others come and go ..but that rs 500 ticket and the challenges he had…bonkers!
Pratt and Whitney has brought a new Geared Fan technology in the Aero Engine market. Hope the issues will settle down soon. Also they are said to be compensating heavily for the groundings.
Say what u want, Indigo is the undisputed champion of aviation, no other airlines in the world has ever shown such a tremendous growth, from 0 to 400 aircrafts in 18 years has never been seen before in the world, wait for 18 more years and indigo will be in the top 3 in the world.. whatever the problem indigo has they will come out of it with flying colours..
one feedback: there is brightness difference in your video and animations.
The sudden increase in expenses and severe drop in loss needs further analysis. The oil prices have remained stable, as have taxation. So why this sudden increase in costs? Are they cleaning their balance sheets by writing off bad debts or has interest costs have gone up or have they offered steep discounts in profitable routes?
The issue related to Pratt and Whitney engines is there for a long time - so why the impact now?
Anyone noticed Ganesh without jacket 😂🔥🔥🔥
ad clips are always shot separately
Privatising the airports of India is what is leading to the price increases customers must pay.
Pls make another video on profitability of Indian airports
I hope Airplane manufacturer companies soon start manufacturing Electrict, Hydrogen and other ways to support airline companies make profit and survive and grow faster.
Can you do a video on Indian Airports in terms of its operations, business model and ownership structure?
Not just India, the whole world is facing this crisis
Indigo is emotion🥹🥹 way back in early 2000 the only carrier which could take a longing middle class biharan( part of the IT force) to Patna from Bangalore for the Annual Chahtt festival and family reunion in around 3 hours in affordable middle class prices - the train use to take 50 +damn hours and leaves were few !!
As much as I believe Indigo will survive this the middle class has to open its eyes to the fact of increasing prices of aviation and the after-effect of almost Adaani monopoly in the aviation development sector and Ambani’s in petroleum !!
#JaagoGraahakJaago
Hello from PCCOE
Our English teacher is recommending your channel ❤
Always amazing videos. Hats off!!
Unemployment is biggest reason 😢😢😢😢
No money only option genarel coach 😢😢😢😢😢😢😢
Then start business don’t crib here
@SRockUU any problem
When comparing 1:13 and 5:37, it does not make sense.
Thanks for the great video, I like your team work
I would like to see what indigo has to do specifically to improve their profits, just like you explained above for quick commerce
without increase of purchasing power , even great product will face losses
That was a good one!!
Adani baba offering higher footfall cost to govt in airport contracts is a big reason for this.
Passing on the cost to airlines and ultimately to customer
Absolutely amazing information.
Question:
Will it be beneficial for airlines to use derivatives contracts like Futures and Options for fuel to offset the volatility of oil since the expenditure for fuel could be calculated in advance?
❤
Dude ,I just noticed that most of your video release after the market closes
Hi think school team, I have the following suggestion for you-
1. While the reasons for losses are clear but it isn't clear from your video as to what would be the course correction steps for indigo to make. While high fuel costs is something everyone knows, grounding of planes is also something many are aware of but if you could add some insights on what possibly could indigo do. That would be real insight to views because the reasons for losses are pretty much first known.
Its also the curse of Indigo employees present and former for treating us like animals with no respect. Anyone who disagrees is the ones who were soap to the managers who were trying to act like team leads.
Actually it's in the national interest that aviation should survive and thrive!!
Airports need to reduce their fees. The govt has to put a cap on this and maybe also partly subsidise with travel related taxes, to let airlines be profitable or it could be a very discouraging industry for investors and will slow down growth.
Wow, from flying high to a turbulence warning! Hope Indigo finds a comfy cloud to nap on while they figure this out! ☁️✈️ #AviationDrama
I don't think it is a major issue for indigo .If you keep the fuel prices aside the grounded planes should return back to service and eventually fleet will be back to full strength .And eventually their economies of scale will cover the losses .
Really appreciate your efforts. I have a question - Why did the airport charges increase by ~41%? Is it a one-off instance? Did it increase for all other airlines as well?
It's because adani took charge of major airports and he increased charges
something felt off in this video, it didnt give that knowledge coming vibe. felt same with some earlier videos too. hoping coming videos bring back that magic
@ThinkSchool - Excellent analysis. You could have refrained from the clickbait title though! The challenges are industry wide and if IndiGo collapses, it will be similar to SBI going bankrupt. Our aviation sector cannot afford it.
Unless of course, IndiGo does something horribly wrong ,that is
After Naresh Goyal's Jet Airways it's Indigo now. Happy to know that this airlines will go bankrupt. One of the worst crew they have and I missed my luggage a few years back while traveling from Chennai to Delhi. The response from the crew was pathetic.
Sir first time in your channel it seems that this video was only to attract viewers not to provide business knowledge to the best
Despite the ACMI, Indigo seems to be having a large-scale problem with its aircraft.
The Bengaluru airport is littered with Indigo planes without engines.
Indigo must be facing a huge parking fee for these permanently parked (abandoned?) aircraft!
They ask compensation from Whitney for faulty engine
Thus getting compensated for all this parking fee
It's temporary cost, not permanent cash burn.
@@SanskarDodya That may not be the whole picture. There are other losses like lost air routes, penalties for not servicing a route, penalty for failing to arrive on-time (because of depleted fleet), etc. Not to mention that the airline cedes space to competition and lost customer loyalty because of canceled/delayed flights.
If compensation could save the airline, why did Go First fold up?