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The Jet saga is a classic case why aviation is a bad industry for investment. Weak mgmt and bad capital allocators keep getting recapitalised. In the words of Terry Smith “It’s like being in a zombie movie. They keep coming back from the dead” /1
2/ The economics of free markets don’t seem to apply to aviation. Given its visibility, employability and historical govt ownership, they keep getting bailed out. Plus some elements of a lifestyle biz keeps bringing new entrants.
3/ Good managers don’t get the opportunity to consolidate mkt share. All the M&A that takes place is weak players coming together or forced purchases (again by govts). All this despite being one of the most efficient industries in terms of operations
4/ Coming to Jet — with debt of $1 bn+, 6-7 aircraft, burgeoning fixed costs and imminent dilution from badly needed significant capital infusion how this trades at 2700+ crs mcap is a mystery.
5/ With what is publicly available you need a heady mix of hope, speculative punting skills and cohones to take a call on this one (end)
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