Mayur Milak on how will landscape of Indian aviation sector change?

"I never thought that they had initially targeted a 60% plus market share. This has basically happened to them because they have been consistent with their game and the others have lacked the whole game. So, this is how they have actually gained in the Indian skies," says Mayur Milak, Asian Markets Securities.

In India, the aviation sector is simple, which is that there is IndiGo, which has lion market share, they are profitable, and they have maintained the market share irrespective of what others have done, whether it is the entry of Tatas into Air India or Go Air which was backed by the Wadias. So, why is that IndiGo gets this entire crown of being a dominant leader and it has been like this for the last couple of years now?
Mayur Milak: I think the first and most important factor is getting your supplies right here. I think what they did as a strategy was great.

So, if you ask me, I never thought that they had initially targeted a 60% plus market share. This has basically happened to them because they have been consistent with their game and the others have lacked the whole game. So, this is how they have actually gained in the Indian skies.


So, how do you see the landscape changing? Jet failed to take off, Akasa is a real deal, SpiceJet has got capital infusion, and Air India has committed to kick in more efficiency. Three years from now, how do you see the landscape of the Indian aviation sector changing?
Mayur Milak: So, I think Indian aviation at this point is at its sweetest spot. If you ask me, the pricing war is a thing of the past. We have not seen any pricing war in the last two years and I do not see that coming in the next two-three years as well.

I think Tatas as a group will have their own set of challenges to merge the two biggies together. SpiceJet of course has raised money, but it is not going to be an easy task.

I think it is a tough task ahead, especially if you look at the global supplies of aircrafts, that by itself is a challenge. We have heard a lot of challenges at Airbus and Boeing, so that actually gives a global crunch.

We have not seen demand coming from Russia and China, so imagine if those demands start coming in, this is going to be further supply crunch on the aircraft. So, clearly, the guys who have their supplies sorted out will be the guys who will be winning the game, IndiGo clearly being one of those. Pricing war behind us. With crude hovering in that $70-80 range, I think this is the sweetest way of making money. I think this gives in a lot of strong cash flows to IndiGo. And the other guys as well, they just got to play their game right. I mean, instead of really gunning down each other on market share, possibly get your balance sheet sorted and get your P&L sorted that is about it.