Indigo stock analysis

Hello and Welcome Until a few years ago whenever we spoke about airlines, for us those who belonged to the middle-income group taking a flight used to be a dream. But in the last few years, the airline industry has grown so big that flights have become a part of our lives. If we have to go a little far we prefer airlines. Today we are going to talk about Indigo. IndiGo, in the Indian airline industry, is a profitable company. 

And which cleared a lot of myths related to the Indian airline industry, and became a profitable company. To the extent that whenever Warren Buffet has spoken about the airline industry, he has said that it is very dangerous to invest in this industry. But IndiGo is such a company that is not only profitable but also in the Indian airline industry it has more than 45% of market share. Why does this happen in the airline industry that even though the company gets launched but does not succeed? If I take a look at the history of the Indian airline industry, There are so many companies that came and even expanded but due to debt and other reasons had to close down their operations. In this video, I will tell you about IndiGo's business model, and I will tell you about how a small company enters an industry where most businesses do not succeed, with one aircraft in 2006 and by 2019 they have 217 aircraft. Apart from this, I will teach you how to do a fundamental analysis of a company in the airline industry. In addition, I will compare IndiGo with its competitors. At the end of the Blog, I will tell you what is happening in this company and what it has to offer its investors. Whether you should invest, sell? or hold? After the 1990s, a new concept came into being in the US airline industry which disrupted the entire airline industry. And that concept was LCC. Low-Cost Carrier companies.

Those airline companies were not present in India till then. India then had three or four airlines operating. This gap was identified by Rakesh Gangwal and Rahul Bhatia. They thought why not bring LCC to India? and bring the airline industry to the common people. So that the growth of the airline industry is bigger and the margins are better too. To talk about its founders, first of all, Rahul Bhatia who understood the regulatory norms of the Indian airline industry, and Rakesh Gangwal who understood the airline industry very well because he used to work for US airlines. This is why he designed such an airline in India which ran at low cost and also gave good margins. In 2004, when this company wasn't even operational, that time this company placed an order for 100 planes with airbus, at a time when it didn't have even one flight in operation. Airbus benefitted from this because they were also planning to enter the Indian airspace. Now you must have understood that IndiGo's co-founders had good knowledge and experience. But how did they make their business model different from other businesses? So the first difference they made was that all their planes which operated in India were the same. If they were using A320, then all the planes were A320. At that time, its competitors were using different models of airplanes. This benefitted IndiGo. Because it didn't have to train their pilots differently. If a pilot could fly one plane, they could fly other planes too. Apart from this, they also saved maintenance costs. If all the aircraft are the same, then their maintenance cost will be the same, there is less training required. In every aspect, IndiGo benefitted from this. This helped IndiGo to become a very big company. 

The second point of difference was that whenever IndiGo gave a new order to Airbus it used to be bulk orders. When Airbus takes bulk orders, it would give discounts to IndiGo. And IndiGo would use this aircraft for only a short time so that the maintenance cost is less, and people would sense the feeling of a new aircraft when they traveled. As you can see from the screen how, when, and the numbers of IndiGo's orders As I told you, IndiGo orders in bulk. That is exactly what we get to see on the screen. For example, in June 2005, IndiGo ordered 100 Airbus aircraft when they had only just started their operations. Later, 180 in June 2011, and 250 in August 2015 Now I will do fundamental analysis. where I will tell you If ever you want to inspect a company see how it is performing in the airline's industry, Then how do you evaluate it? What factors and parameters should you consider? Whenever we do an analysis of an airline company the first and the most important point is Every company Every airline company includes in its annual report what their passenger load factor is. 

Now you must be thinking why I didn't explain it to you. In simple terms, if there is an aircraft that has 100 seats, and it flies from A to B if only 30 out of 100 seats are occupied, the occupancy then becomes 30%. 70% of the seats are empty The less it is, the more dangerous it is for the airlines. Because it will have the same expense to fly the plane. If the seats remain unoccupied the company will incur losses. To talk of IndiGo's load factor it is around 86%. As you can see from my screen, I have compared IndiGo's load factor with that of its competitor Spicejet. IndiGo's load factor in comparison to that of 2018 has gone down slightly, to 86%. To compare this with the load factor of SpiceJet, it is now 92%. Which is way better than Indigos. But to compare it with that of the previous year, the load factor of SpiceJet has come down a little in the last year. The second important parameter on the basis of which we can analyze a company in the airline industry is RASK. This tells us if an airline flies one kilometer, how much profit it makes on one seat. If I make a comparison on the basis of RASK on IndiGo with last year then this year IndiGo's RASK has come down a little. Last year IndiGo's RASK was 3.64 this year it is 3.57. So the revenue that IndiGo makes on every seat per kilometer has gone down. But if I compare this with its competitor SpiceJet then the RASK of SpiceJet is bigger this year as compared to last year Now you know what IndiGo's revenue per seat per kilometer is. But until we know how much expense there is against this revenue we will not be able to analyze the company very well. There is a parameter that calculates expense per seat per kilometer which is called CASK. In the case of IndiGo, CASK was 3.15 last year, per seat, per kilometer. 

This year it increased to 3.59 per kilometer. Now I have told you that cost per seat for IndiGo has increased. What factors affect these costs for a company in the airline industry? It is important to know that too. Whenever we talk about the Indian airline industry there are two main factors that impact the costs: First, crude oil. Because to run an airline business the main expense is in crude oil whenever the price of crude increases then the cost increases. Second: currency depreciation. Because all our oil is imported, so when Indian currency depreciates, the cost to import oil also increases. This leads to increased prices. There is an interesting point for you here. IndiGo's CASK is higher than its RASK. So IndiGo must be running on loss. But no, IndiGo has showcased profits this year. Because IndiGo has other means of income. If I talk about those revenues which IndiGo gets for example from extra luggage, ticket cancellation charges, ticket modification charges, and cargo business, in fact, IndiGo grew by 17.6% than last year. Now investors understood some of this. But before making an investment, it is important to know everything about an industry. Now you must be thinking which company has how much market share in the whole Indian airline industry, Come on, let's discuss that. 

As you can see on the screen, in the Indian airline industry, the highest market share is with IndiGo which is 47.1%. After IndiGo comes SpiceJet with 13.7%. India has a market share of 12.9% Friends, This list has some companies that are no longer operational. There is an interesting point that I would like to point out. If I talk about Low-Cost Airlines in the entire industry 76% of India's total market share is with Low-Cost Airlines. As IndiGo started now more and more companies have come up which operate on the same model. Until now I explained how to fundamentally analyze IndiGo. You can take more inputs, and research deeper. But it won't be fair if I don't give you the current news. Because in recent days, a piece of news related to IndiGo came in which an allegation was made on IndiGo in relation to corporate governance. This allegation was made by none other than one of its co-founders on the other. So, if you are an investor in Indigo or are thinking about investing, study this news carefully and use the information I gave you and then decide on your own whether you should buy this share sell it or hold it. Friends, we do not give any recommendation in any Blog to buy or sell any shares. All our videos are strictly for educational purposes. We try to explain in basic terms how to analyze a company before investing.

How to become airline pilot with EASA licence

Hello and Welcome Senior Flight Training Consultant at Flying Academy. Today I'm going to tell you how students of Flying Academy becoming airline pilots in Europe. So quick answers you need to obtain an EASA ATPL Frozen license. Let's take a look at what it consists of. It all starts with the Private Pilot License -the first step in the aviation career. The holder of a PPL license can act as a pilot in command or co-pilot on airplanes in non-commercial operations. To obtain a PPL license you will go through theoretical and practical exams. Once that's set, we move to the major theoretical part which is ATPL theory - the highest level of aircraft pilot certification. During ATPL theory you will need to pass 14 exams for different subjects which are covered in a more detailed way comparing within the PPL course. Meanwhile, you will need to finish your Nights Rating. This qualification allows students to fly during night time in visual meteorological conditions. From this point, you will be able to start your time building to meet requirements at the end of your training. Actual fun starts after finishing ATPLtheory. Yes, I'm talking about the practical part. First is Instrument Rating. It allows you to use navigational instruments available in the pilot cockpit. It's useful in conditions of low visibility caused by weather, for example. Then training moves to the Commercial Pilot License part. 

CPL the qualification that permits the holder to act as a pilot of an aircraft for remuneration when issuing CPL license pilot will have 200 total time flight hours, out of which 100 as a pilot in command. Finally, the student joins his last part of the training - Multi-Engine Piston add-on Multi-Engine Piston is a rating that extends privileges of Private Pilot License and Commercial Pilot License and allows you to fly aircraft with more than one engine. At this moment we have different courses for the students with no experience in aviation what so ever. At the end of those, you will get the same license ATPL Frozen. However, there are some differences in training approach, time, theory lessons, and additional qualifications in each course. Let's take a look at what we have got for you. 0-ATPL is a modular program that you can finish in 12 to 14 months. At the end of the training, you will have 200total time flight hours. Part of the training ATPL theory is done in the group. Nevertheless, the remaining parts of the training are done individually. You can start your program anytime whenever it's most comfortable for you. The modular 0-ATPL program is suitable for students who are not able to be in the training on daily basis and who need a more flexible schedule. It makes our 0-ATPL program the top choice among the trainees. The modular course is more flexible than an integrated one but it requires more dedication, self-study, and discipline. 0-ATPL with experience is the program with the unique opportunity to finish your PPL and teambuilding in the Miami United States. 

The perfect weather conditions will allow you to finish two training modules in the shortest terms. After time building you will be able to continue your training in one of our European bases in the Czech Republic. The best thing about this course that at the end of the training you will get two licenses PPL FAA and EASA ATPLFrozen. How cool is that! 0-1500 is the same as the 0-ATPL program designed, especially for European Union citizens. You can finish your program in14 to 16 months. After getting your ATPL Frozen license you will finish the flight instructor course. This will give you the opportunity to get your first job as a flight instructor in Flying Academy for the next 24 months. During the employment period, you will reach 1500 hours. The program 0-1500 is the best way to start your career in aviation, to gain significant experience and many valuable flight hours ATPL integrated program is designed for students who want to be perfectly ready for their airline job straight after the training.

 The duration of the course is 14 months. Theoretical preparation is done in small groups on a daily basis. This program includes a significant number of IR hours. Moreover, multi-crew cooperation and jet orientation course are also included. So,  that's what you need to know about our European courses that will help you to get to the pilot cockpit of international airlines. I hope that was very helpful for you. Make sure to the checklist of your blogs. You can find more detailed information on our website 

How Braniff Went Bust: The Collapse Of The Fastest-Growing Airline In America

Hello, and Welcome In 1982, Braniff International, one of the most profitable and largest airlines in the world,   ran out of money. The world, however, wasn’t really surprised. Why weren’t they you may ask? Well,   Braniff had been showing signs of a struggle for the past few years, and everyone was just waiting for the straw that would break the camel's back. But what happened to cause them to drown in an industry that it once dominated? This is the nosedive of Braniff International. Braniff started out in the year 1926, and over the next five decades,   they became a major carrier in the Southwestern United States. From their main hub in Dallas,   they grew to serve many domestic and international markets with their large fleet of jets. Some iconic aircraft the airline operated in its heydays included the Boeing 747, the 727,   the Douglas DC-8, and even Concorde flights between Dallas and Washington DC   in partnership with British Airways and Air France. Everything was going extremely well for the airline until 1978 when airline deregulation was enacted. 

Since the government no longer controlled the routes and prices airlines could set,   Braniff placed a big, Texas-sized, bet on deregulation and decided to expand rapidly. The number of routes they served increased by 50%   overnight as Braniff built itself a domestic and international empire.   In order to finance their new operations, the airline borrowed heavily. They also moved their headquarters into a new facility in Dallas in 1978, which cost $6 million in rent a year. Braniff expected profits to increase, but, the exact opposite happened. Passenger numbers decreased due to competition from other airlines, mainly American and Delta Airlines, which were also based in Dallas. In addition, Braniff’s costs rapidly increased along with their expansion,   with Braniff’s fuel expense increasing 94% to $400 million. Increased fuel usage combined with rising jet fuel prices was a recipe for disaster,   and Braniff was pushed further and further into debt as the country entered into a recession.   Layoffs preceded in the next few years, with the company laying off a quarter of its workforce. By 1981, Braniff was over $700 million dollars in debt. The industry had too many seats and not enough passengers to fill them. Some Braniff flights were taking off less than half full,   and the quality of service had started to dwindle. Braniff’s board members realized that a change in management was imminent, so the airline brought in staff from the newly successful Southwest Airlines as the last resort to save Braniff. They made another bold move by converting planes to either all economy or all First class layouts.

While it was innovative, passengers who wanted higher quality services switched to American and Delta Airlines, both of who were increasing their services to DFW. Next, Braniff launched giant sales to advertise its Texas Class,   a new economy service, with a simplified fare structure. Other airlines responded by matching Braniff’s sale prices and offering more flights to the same destinations as Braniff. In January 1982, Braniff started recording negative cash flows,   which meant that they were spending more money than they were making.   The company needed cash desperately if they were going to have any chance of survival. Braniff attempted to sell off its Latin American routes to Pan Am,   but the Civil Aeronautics Board denied it, citing that Pan Am would have a monopoly in the area. The routes were eventually sold to Eastern Airlines for $18 million,   but Braniff had already lost more than they received by the time the new deal was made. Not knowing where else to turn, Braniff launched crowdfunding. A donation department was set up at Braniff’s headquarters to try and raise money to keep the airline afloat,   but they still couldn’t get the funds they needed to pay their bills,   despite the generosity of thousands of people in the Dallas area. A few months later, there was a threat of an industry-wide pilot strike that left Braniff with no other options. On May 12th, 1982, Braniff International Airways ceased all operations.   All flights were immediately grounded with thousands of passengers and crew members stranded. The issues of high competition and too few customers that brought down Braniff were similar to what plagued other airlines, but since Braniff had spent millions expanding their network right after deregulation, the airline was in a position that made them extremely likely to fail. Some analysts agree that the actions of management after Braniff’s rapid expansion were virtually pointless, as the airline had already put itself in a position that was unrecoverable. However, this wasn’t the end of Braniff. 

There were two comeback attempts:   one in 1984 and one in 1991. The first attempt used a low-cost business model but failed after 5 years due to high competition. The second attempt was even less successful, with the airline operating only a year before it stopped flying due to issues within upper management. Braniff’s subsidiaries continued to operate after the original airline shut down.   Braniff Education Systems, Braniff International Hotels,   and even their aircraft maintenance services carried on the legacy of the airline. Even Braniff’s parent company, the one that used to run the original airline,   is still operating. They’re now a branding and licensing firm that still owns the airline’s intellectual property and is only one of two defunct airlines to do so, the other being Pan Am. Recently, more companies have been created to protect all the trademarks, copyright,   and intellectual property of Braniff and all the other airlines it acquired during its growth. But Braniff’s influence in the airline industry can also be found today. In 1983,   a year after Braniff shut down, employees from the original airline got together to form Sun   Country Airlines in Minneapolis, which still operates today as a low-cost holiday airline. If we ever want to see the original Braniff flying again, it’ll have to be a decision by the companies that own the branding to either start the airline themselves or sell the usage rights of their branding. But until that time, it’s legally impossible for the airline to start up again. Braniff’s downfall may have been a nasty one, but it just goes to show that when airlines need to make big decisions, they must take industry predictions into account accurately.   Otherwise, they might end up destroying themselves and nose-diving into failure like Braniff.

The Next Big Airline Merger?

Hello and Welcome In the past fortnight, we witnessed KoreanAir announce plans to takeover Asiana Airlines in the coming years permitting final approval and 0 the papers being signed. However, it may not be the last we see of these types of mergers with carriers around the world given the current climate and overall conditions that have impacted the Aviation Industry. A new article by Bloomberg’s Japan site which can be found below in the sources area has dived deeper into what an expert who previously worked with the Prime Minister in the Growth Strategy Council believes should take place and it’s quite interesting. He believes that ANA and JAL should become one, this comes after both airlines are currently like most carriers in dire need of additional cash to sustain their operations, aircraft, network, and employees during this global pandemic. 

In fact, his ideas continue as he believes there's a way that the ANA and Japan Airlines brand can be brought together as one and still work and that's in the form of splitting the domestic and international scene in half. While the airline would act say as one, the international operations would be separate from the domestic operations almost acting as if there were two separate carriers, a low-cost domestic one potentially and then a full-service intentional carrier. The difference though is that they are flying as one. ANA and Japan Airlines coming together as one I must reiterate has not been confirmed, in fact, it’s only a mere suggestion at this point and therefore it’s not set in stone. Ultimately though further consolidation of areas is likely given the current state of the Aviation Industry. 

It provides ways for carriers to survive through this pandemic even if it means the collapse of one specific airline naming. As for this, who knows whether it’d be JALor ANA that’d lose its branding. It could quite literally be either if they were to go ahead with the advice given. So are there benefits to this? Yes and no. However, ultimately the negatives outweigh the positives. The current global pandemic we are going through will not be here in a decade, hopefully, but a change as big as the merging of two big carriers like that of ANA and also Japan Airlines will still be. So while travel demand will return completely to normal Japan has lost one of its valuable assets to the tourism industry as the two formed during a crisis that will not be with us forever. Complacency is another thing that needs to be considered should this merger ever actually eventuate. One of the many benefits of having a competitor, whether that's Airbus and Boeing going up against it or two carriers battling it out in the same country is that it pushes the pair or maybe more to better themselves with every passing month. They continue to look at ways to advance in the future whether that be with their pricing model or something as simple as various cabin changes! What are your thoughts on the discussion over a potential merger though? Feel free to let me know down below in the comments as always thank you very much for the continued support