Wednesday, May 08, 2013

Can Jet-Etihad deal revive media spends in the cautious airline market?

The Indian aviation sector is expected to be the third largest market by 2020 and is expected to handle 330 million domestic and 85 million international passengers by then. Post liberalisation, the sector has seen enormous entry of private players.
The aviation sector so far has not been very aggressive on the media spends side. The reason attributed by most experts is the lack of money. Sharan Lilaney, Aviation Analyst, IIFL mentioned, “This is a cash crunch sector. There is no money with the airlines. Whatever money comes is used in paying off debts. Hardly any money is spared for advertising.”
In September 2012, the government liberalised the FDI policy and allowed foreign airlines to buy up to 49 per cent stake in Indian carriers under the government approval route. The liberalisation has been made to open gates to additional avenues of finance for Indian carriers which are currently paralysed by mammoth operating costs and mounting debt.
08/05/13 Abhinav Trivedi/