Air travel is a pretty glamorous business. It makes sense that with all the economic development happening, people are going to travel more and more. There is a lot to this business that doesn’t meet the eye. The following is a very amateur analysis of the airline sector and why I would never buy a stock of a airline company.

Heavy Debt: All airlines operate under a very high ratio of debt. So basically time is of the essence. More the time the airline stays in the air the more money the company makes. But god forbids something goes wrong and the equations go haywire. The amount of money involved is huge and hence the risk is excess. It is very stressful and difficult to manage a show under such a heavy debt.

High Costs of Planes and Spare parts: A plane and everything related to it is expensive. An airline certified nut costs 4 times the normal nut. There is nothing different about both of them. Similarly, different spare parts and services are even more expensive. There are literally hundreds and thousands of spare parts. It is also required to stock all these spare parts because you don’t want to delay a take off for a spare part. But due to the sheer number of spare parts the logistics and inventory cost associated is huge. The money spent in buying spare parts is basically blocked.

High cost of skilled labor: Not everyone can work on plane. You need to be certified. The number of certified labors are pretty less and hence they earn a decent salary. The labor is expensive.

Monopoly of Original Equipment Manufacturers (OEMs) : Not a lot of companies make commercial planes. Not a lot of companies make parts and systems for commercial airlines. Not a lot of companies make engines for commercial airlines. Usually, the number is 2 or 3 in each field.  Therefore, these companies enjoy some of the most envious profit margins on earth.

Oil Dependent : The amount of risk one is bearing greatly increases when one’s business is solely dependent on fuel. Fuel prices are volatile. Unless you are a airline operating out of gulf you are pretty vulnerable. The profits of your business are greatly susceptible to volatility of the crude prices. This is a key element out of your control. I would rather prefer a business where the managers have a much more control over the business.

Low Profit Margins: The airliner’s usually don’t enjoy huge profit margins. They have net profit margins in the 6-8% range. Its just that the volume is huge and hence the net profit looks big. I am sure there are far better businesses that enjoy better profit margins.

Think about it. If you have a counter argument, I am game.

Here it is, Just like I promised. I know it looks like facebook and that is how it is supposed to look. I really like the theme but I think I could use some more personalization. You’d probably be seeing my avatar there and better cover image.

I am not sure how I am going to implement the ads though. But I am sure something can be worked out. Where there is a will, there is a way. So yes, do expect to see some ads on the post. It wouldn’t really hurt if you wanted to check out the advertisers you know.

If you have some suggestions regarding the new theme, do let me know. I could really use some suggestions.

I was looking around the block for a new theme for one of my existing projects and I came across some pretty neat stuff. I think the blog is a little dull and too straight foreword. There needs to be much more personal to it.

I am considering a facelift and a much more. Its going to be more social. But due to aspects and factors relating my business being open about my actual identity is not a good idea. I’ll try to connect on a much more personal level but I am not really ready to reveal my identity as of yet.

Look foreword to greatness and awesomeness !

I know this is a bit weird but there is something I have observed. My hair fall was minimum back in India. The dandruff issue was not serious and almost negligible if you ask me. Its been just a few weeks after I have landed and the issue is back again.

What has changed ? My scalp experiences much more direct sunlight and the water I use. But I have a hunch its the later. I have heard other people complain about this too but this time its happening to me.

The water that comes in India is fresh water obtained mainly by rain and stored in dams. The water we have here is obtained mainly by desalination. Either the chlorine content is too high or there some other voodoo shit in it.

I have normal candle filter that filters the water before the shower but I doubt its doing anything worthwhile. I am planning to get a much more sophisticated filtration system installed. I want to see the difference.

I’ll keep you posted. If you have incidents you want to share. Do drop in.

Many a times brilliance strikes a human being from nowhere. He gets an idea that can change the world. He thinks a bit about it and finds it feasible.  Then he gets occupied with his day to day responsibilities and forgets about the brilliant idea. The idea never goes from thought to execution.

Many great people roam around with books/diaries. This is to ensure that no idea is lost and each idea is taken to its full potential. Some take it one step further and document their effort. Leonardo Da Vinchi is a striking example. He would document all his ideas, experiments and projects. He was a genius.

Keeping this in mind, I’ll be carrying a pen and book everywhere I go to ensure I am able to note down the ideas that come to me. I’ll make sure I dedicate enough time to see the ideas through and materialize. The power of one’s brain is limitless when used in the right manner.