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Dexter Capital Advisorsย โขย 1d
Since Trump slapped 50% tariffs on us and called us a DEAD economy, many have foolishly called on the Indian government to ban the use of Boeing planes. And this is just so stupid, and a clear sign of zero understanding of how this will hurt India more. Let me explain. .. Every Indian airline primarily works on the same principle. - Place big orders spread over the years to get big discount per plane - Pay a small part of the bill value in advance to book the delivery slots - because production capacity is limited and you donโt want growth to take a hit - As you keep receiving the planes, sell them at a markup to lessors, and then lease them for 10/12 years .. Now think this way. Saying no to Boeing woudl create what problems? 1 - Suddenly, all the token fee already paid by Air India and Akasa to Boeing for those massive orders of 200+ planes each would go to zero - Net loss 2 - They will now need Airbus planes - for which delivery slots are no longer available up to 2032 - Meaning, apart from planes you already had on order with Airbus (yes for Air India, no for Akasa), you have no options 3 - This will mean there would not be enough planes to service the ever-growing demand for civil aviation in India, which will drive a big demand-supply mismatch and push up flight ticket prices in India - And also slow down growth 4 - This will further increase IndiGoโs market share beyond the present 65% mark, because it has enough Airbus planes booked (as it only operates Airbus) .. Now, I know, there would be some who would say, even if Air India, Akasa, Spicejet, etc, canโt acquire additional/fresh Airbus jets due tpo unavailability of slots, they can lease planes from the market. But, common sense - this will push up the demand for the number of Airbus planes available in the markets (which wonโt change) - and hence also push up the cost to get them. .. So, will banning Boeing planes help Indiaโs cause against the US (particularly Trump)? No. It will only enrich Airbus and its European owners. - What we need is to find areas where we have substitutes, or potential to build substitutes for US tech, be it in hardware or software - And frankly, that is again impossible as on date, because our priorities have never been in line with that agenda, while in Chinaโs thatโs quite been the sole focus in last 15yrs. And the result is pretty palpable Thus, letโs demand focus on correcting this bit, and not birthing new problems that slow us down, and hit avg Indianโs already small pockets. No?
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