AIRLINE STOCKS IN DEMAND
The whole aviation space is in some tizzy. Jet is getting into ever deeper waters with every passing day. The way it is going, it may soon be SBI Airlines! Pilots are threatening to move out, planes are grounded every day (now 38 planes), Vistara is grabbing their pilots, the other two airlines are grabbing their passengers etc. etc. Despite all these the stock is steady! The Oct18 low was at 155 and we are quite far away from there. So, clearly, then, the market is not betting on Jet going under. Bottom fishing here is for those who have holding power and therefore not meant for traders.
Indigo has been surging of late and seems to be attracting those that want to still invest into the airline space. The all-time high is not too far away. The airline stock remains the best bet in the aviation sector for now.
Spice jet has been a bit subdued and not really participating much in the current activity. Price wise it needs to recover above 95 levels for it to regain some of its past trend strength. We can look at it once that happens. Until then, however, the stock may remain depressed.
The aviation industry in India is still quite nascent. In all, we have about 450 planes up in the air every day. Compared to this China has about 2000 and the US has about 10000! Given that our population is vast and the move towards air travel has picked up leaps and bounds the potential for aviation business is very big. We are seeing some hiccups right now and perhaps some consolidations shall happen. But long term bets are likely to pay off, is the reckoning of larger players.
Since all these stories will play out over the much longer term, it is better to keep a trading bias on the aviation sector rather than invest- unless one has a lot of money and lots of patience.
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