Even for an industry inherently tricky, Indian aviation has long stood out like a plainwreck due to its high cost structure and infrastructural bottlenecks.
Some airlines in India are again making profits, but that is thanks largely to benevolent crude oil prices. Even so, they are not truly out of the woods. Indian airlines have lost more than $10 billion since 2009 while their debt stands at around $11.3 billion, according to aviation consultancy Capa India.
The only Indian airline to have remained unaffected by the misery is IndiGo, the low-cost airline founded by Rahul Bhatia's InterGlobe Enterprises, an aviation and travel services firm, and former US Airways CEO Rakesh Gangwal in 2006. IndiGo has actually prospered in this troubled industry, consistently reporting profits from its third year of operations. It enjoys a nearly 40% share of the Indian aviation market, the largest for any airline.
Investors have endorsed its steady, stellar performance. The airline had set prices between Rs 700 and Rs 765 a share for its recent initial public offering, which many analysts considered steep. But not only was its sale of shares subscribed more than six times, it also made a stunning debut on the market, gaining early 18% on listing. IndiGo is now valued at around $6 billion.
10/12/15 The Economic Times
