Consider these names: East West, ModiLuft, Damania, NEPC, Paramount. If you have recently taken to the skies and these names don’t ring a bell, let’s add a few more names. Deccan, Sahara and Kingfisher. Aha! We are talking about airlines that have gone out of business or got taken over. Like everywhere else, Indian aviation has been a graveyard for private and public sector airlines over the last two decades. For every major airline that went under after serious effort, there are two more minor ones that flashed by like shooting meteors.
Entrepreneurship in the segment has been driven more by ego than Ebidta. They all came, they tried their hand, and they (mostly) failed. The jury is still out on the ones still flying the Indian skies: Especially Jet and SpiceJet. Industry insiders see IndiGo, and GoAir to a lesser extent, as better placed to remain long-term players. But with low-fare AirAsia and full-service Tata-SIA set to gatecrash the Indian airspace this year, one should not count anybody as sure-fire survivors. Of course, we have left out Air India, India’s public sector carrier. It is fed by taxpayer doles, but the shrinking space for public sector aviation can be deduced from the names that vanished: Vayudoot, Indian Airlines (later named just Indian).
No industry has probably destroyed more value than Indian civil aviation, thanks to bad policy and even worse business sense. Even in an industry that saw irrational entry barriers, limited competition and crony policy-making, the surviving players have barely been able to keep their heads above water, leave alone make profits. In this issue of Forbes India, we chart the declining fortunes of Jet Airways, one of the pioneers of private civil aviation in India, whose promoter Naresh Goyal is thrashing about in turbulent airwaves to save his airline from nosediving. Temporarily rescued by Etihad, Jet’s operations in India have now been partly reduced to playing feeder to Etihad, even while its debt burden remains humongous.
18/04/14 R Jagannathan/Forbes India
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Entrepreneurship in the segment has been driven more by ego than Ebidta. They all came, they tried their hand, and they (mostly) failed. The jury is still out on the ones still flying the Indian skies: Especially Jet and SpiceJet. Industry insiders see IndiGo, and GoAir to a lesser extent, as better placed to remain long-term players. But with low-fare AirAsia and full-service Tata-SIA set to gatecrash the Indian airspace this year, one should not count anybody as sure-fire survivors. Of course, we have left out Air India, India’s public sector carrier. It is fed by taxpayer doles, but the shrinking space for public sector aviation can be deduced from the names that vanished: Vayudoot, Indian Airlines (later named just Indian).
No industry has probably destroyed more value than Indian civil aviation, thanks to bad policy and even worse business sense. Even in an industry that saw irrational entry barriers, limited competition and crony policy-making, the surviving players have barely been able to keep their heads above water, leave alone make profits. In this issue of Forbes India, we chart the declining fortunes of Jet Airways, one of the pioneers of private civil aviation in India, whose promoter Naresh Goyal is thrashing about in turbulent airwaves to save his airline from nosediving. Temporarily rescued by Etihad, Jet’s operations in India have now been partly reduced to playing feeder to Etihad, even while its debt burden remains humongous.
18/04/14 R Jagannathan/Forbes India
