What do you guys think about Indigo as a long term buy (~5-10 years)? Its trading at 10-20% from its all time lows

[andrewofthetribe]

@muse86 See markets will not like a stock because of point 2 listed under cons. As you have also captured the fixed costs are high in this industry to be operational.
I would stay away.

 

[chamtt]

@muse86 Another con is because of Government's directive they rolled back the earlier 25% pay cut across board, now only top executive's are taking the cut voluntarily. If lockdown is extended or passenger air travel is curtailed even with social distancing norms etc being in place, revenue will take a big hit.

Positive is Indigo will be the last strong man standing, Spicejet without Government support is not going to survive due to the debt it carries. Tata might still stick around due to emotional reasons and not financial reasons.

I was a shareholder for last few years, got out around 1200/-

Around 700/- is the lifetime low, bet it will go there and then we will be in un-charted territory. Should keep a watch to buy but time to pull the trigger is not yet there.

 

[jmaak]

@muse86 Got into both spicejet and indigo sometime in March. Aviation isn’t gonna disappear and my personal opinion is people are overestimating how low the demand will be. Sure video conferencing is a good substitute but ask any sales person what he prefers.
Ultimately aviation has to boom in India given our sheer size and things like the udaan program. There is a huge opportunity for consolidation now because of the crisis and hopefully indigo and spice will emerge as the 2 largest players. Even if spice is rolled up into indigo via a buyout, not only will this be good for stocks of both companies but it will create an airline with an undeniable moat.

 

[malachithelion]

@muse86 Great option, if you want to turn a millionaire and currently are a billionaire... for the rest of you stay away

 

[afolloweroftheway777]

@muse86 It’s best to stay away from the passenger airline business. Their future is uncertain. The whole business model of surviving airlines, post lockdowns, will undergo upheavals. Typically they need 75-80% loads for profitability. But the whole idea and mode of airline travel is going to change. They certainly won’t be able to carry 75-80% passengers in the near future because of social distancing. Lower loads will mean higher fares, which in turn will mean lower demand, which will put the economics of airlines into a tailspin.

Best stay away from airlines until the situation becomes clearer.

 

[gogfrog]

@muse86 @muse86 - Did you end up buying? Seems like a good investment overall now? Any views?

Indigo is basically having a monopoly over the market perhaps until Tata comes with their planes and better strategy.

I understand everyone's views here but India is heavily in need of good air travel and Govt is also supporting it through policies. Why would Tata invest so much in the industry if what they can only see is losses in the future.