Wednesday, March 20, 2019

Boeing 737 Max to dent SpiceJet, Jet Airways earnings? Is Indigo clear winner here? Analysis of this aviation situation

Mumbai: Boeing 737 Max family which was launched to become a success story of their maker and change the way a passenger travels through air, has now started to give sleepless nights to the aviation industry across the globe. Back in India, the impact of this Boeing 737 Max has emerged to be a serious business dampener, after two fatal plane crashes carrying 737’s Max 8 jet. The 737 Max 8 was the first to take off in the Boeing’s 737 Max family, and this engine which spells out classic body, spacious seats, LED inside roof, silent engines and highly advanced system has now become least favorite. Reason pilots are finding it difficult to fly, and two crashes have cost many lives. This has led many customers ban the Boeing 737 Max jets, with that said, domestic airlines SpiceJet and Jet Airways are among them. Now because SpiceJet and Jet Airways have quite a hefty number of 737 Max, the grounding will put an effect in their earnings. While these two airlines will be struggling, it is now clearly expected that another airline namely Indigo will be a winner with more passenger growth and hence good profit ahead.

Two airlines,  first Lion Air Flight 610 in October 29,2018, and second Ethiopian Airlines Flight 302  on March 10,2019, crashed just few minutes after take off resulting in with no survivors. Similarities between these two crashes were that, both crashed within few minutes of take off, both pilots struggled to gain altitude, both planes ascended and descended several times before nosediving.

While the investigations are still going on of both the airlines, Boeing 737 Max has been grounded from countries like like China, South Africa, Morocco, Poland, Ethiopia, Singapore, Indonesia, Netherlands, Mongolia, Argentina, Cayman Island,  Iceland, Ireland, France, Malaysia, Germany, Oman, UK and India have grounded this jet.

In India, SpiceJet and Jet Airways alone have 116 and 125 of Boeing 737 Max 8.
Jal Irani and Vijayant Gupta analysts at Edelweiss Securities said, “We expect yields to remain strong as on the supply-side not only would Boeing 737 Max additions remain frozen in the foreseeable future, JetAirways has permanently sold 16 of its owned planes in addition to short-term grounding by lessors.”
19/03/19 Pooja Jaiswar/ZeeBiz

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