First, the good times ended at Kingfisher. Now, it’s hard to get more when you fly SpiceJet because the low-cost carrier is barely airborne.
The last few weeks have been a familiar aviation nightmare for SpiceJet: delayed salaries, cancelled flights, the prospect of operations stopping because of unpaid dues to oil companies and airports.
This isn’t scaring off new entrants—Air Asia has started operations in India, while Vistara, the Tata-SIA joint venture, will start flying soon.
New entrants coming in and poor performers folding up is a part of any healthy industry, but a close look at the financials of India’s civil aviation sector shows it is anything but.
These turbulent times are a particular headache for Indian banks, mostly public sector, which have lent a total of Rs 28,555 crore to different airlines. Of this total, Rs 2,448 crore is currently qualified as non-performing assets (NPAs)—loans and interest that are overdue and unpaid.
Given the precarious finances of some airlines, more loans could become NPAs.
05/01/15 Amit Bhandari/Indiaspend.org/Business Standard
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The last few weeks have been a familiar aviation nightmare for SpiceJet: delayed salaries, cancelled flights, the prospect of operations stopping because of unpaid dues to oil companies and airports.
This isn’t scaring off new entrants—Air Asia has started operations in India, while Vistara, the Tata-SIA joint venture, will start flying soon.
New entrants coming in and poor performers folding up is a part of any healthy industry, but a close look at the financials of India’s civil aviation sector shows it is anything but.
These turbulent times are a particular headache for Indian banks, mostly public sector, which have lent a total of Rs 28,555 crore to different airlines. Of this total, Rs 2,448 crore is currently qualified as non-performing assets (NPAs)—loans and interest that are overdue and unpaid.
Given the precarious finances of some airlines, more loans could become NPAs.
05/01/15 Amit Bhandari/Indiaspend.org/Business Standard
