Moneycontrol
Last Updated : Oct 25, 2018 12:36 PM IST | Source: Moneycontrol.com

3 Point Analysis | Why are top investors betting on airline companies

There are many challenges that the industry is facing. Airline companies are reeling under high operating costs because of increasing crude oil prices, depreciating rupee and low airfares.

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Even as airlines struggle to stay afloat, top investors are adding aviation stocks to their portfolio. Carriers in India have had a good run for the last few years as double-digit growth in passengers for 42 months has made it the world’s fastest-growing aviation market.

By 2020, India is tipped to be the third largest aviation market, after the US and China. Yet, there are many challenges that the industry is facing. Airline companies are reeling under high operating costs because of increasing crude oil prices, depreciating rupee and low airfares.

All these factors are squeezing the margins of airlines.

Kinjal Shah, Vice President, Corporate Sector Ratings, ICRA, says that the Indian aviation industry is likely to report an aggregate loss of Rs 3,600 crore in FY19.

Sakshi Batra does a 3 Point Analysis on why the sector is being looked at as an attractive bet, despite the huge losses, as top investors like Rakesh Jhunjhunwala are adding more aviation stocks to their portfolio.

Watch the video for more...
First Published on Oct 25, 2018 12:36 pm
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