Sunday, February 24, 2013

Funds-flushed Emirates, Etihad, Qatar well placed to catch the tailwinds on Indian flight path

Even for an industry that has always been inherently vibrant, last week was unusually eventful for aviation. It began with the news that a sale of stake by Jet Airways, India's second-largest carrier by passengers carried, to Abu Dhabi's fast-growing airline, Etihad Airways, will be delayed. If the news was disconcerting, Jet didn't show it.
The airline cut fares by nearly a half on Tuesday, mimicking a move by budget carrier SpiceJet in January, when Indian air travellers had become accustomed to the idea that the era of cheap airfare was history. A day later, the Tatas said they were taking another shot at aviation partnering Malaysian budget carrier AirAsia. Turns out runaway airfares will be history.
Understandably, in the euphoria over lower airfare, the news concerning Jet receded into the background. Yet for Indian aviation, a Jet-Etihad deal trumps the other developments in significance. Falling airfares are a flash in the pan. SpiceJet's offer was a buffer against a lean travel season and Jet's price cut was nothing but a counter. As for the Tatas and AirAsia, these are early days to ascertain the success of their venture.
24/02/13 Binoy Prabhakar/Economic Times