The aviation industry not only in India but also across the world had hit majorly because of the Covid-19 pandemic. Many countries are in lockdown and put travel restrictions is causing a huge loss in the balance sheet of the aviation companies. Things may not be the same for these aviation companies for the next 6 to 12 months. The shift of investment form the aviation sector is clearly visible in the investment strategy of many investors and change in share prices.
Warren Edward Buffett, chairman and CEO of Berkshire Hathaway in his recent annual meeting said that “thanks to the pandemic, the world has changed” for the aviation industry without any fault of theirs”. Buffett company who brought stake in 4 of the largest US airlines, which was valued at $10 billion in 2019 had sold his entire stake in April 2020. This show the time had changed for investing in the aviation sector. Almost 2 months of complete lockdown in India has worst hit it many companies balance sheet. Major players in the India aviation sector like Interglob aviation (who hold more 47.5% of the domestic market share) and Spicejet (second largest airlines in the country) are also facing the worst situation. There is a sharp decline in the share prices after the lockdown.
There is a prediction form ‘Center for Asia Pacific Aviation (CAPA) which delivers market analysis and data for decision making in hundreds of most reputed organisations has predicted that ” By the end of May 2020 most airlines in the world will be bankrupt”. There will a sharp fall in the demand for air travellers will become a major challenge for many of the aviation companies. There is the possibility that many big investors who follow Warren Buffett will shift their investment from the aviation sector too.