Monday, September 10, 2018

Aviation: save the goose that lays golden eggs

Mumbai: The number of Indians flying may be growing at about 20% a year but, in contrast, most domestic carriers are bleeding. The Indian airline industry is facing turbulence. This time around, legacy issues and over capacity seem to have aggravated the situation.

Like in the past, high oil prices, currency fluctuations and lower yields have pushed airlines into a cyclical trap with at least two full-service airlines, Air India and Jet Airways, gasping for breath.

Staff salary payments have been delayed and frantic efforts are on to raise fresh capital. The three full-service airlines, including Vistara, have been posting losses. Low-cost airlines are better placed but except for IndiGo, none has the balance sheet to withstand further deterioration in environment.

“Of course, we are impacted,” said GoAir CEO Cornelis Vrieswijk. “But we have massive opportunity to bring costs down further. We are focusing on operational efficiency. We have to be efficient and low-cost to survive.” GoAir is progressively inducting fuel-efficient A320Neo aircraft to keep costs low. It is also banking on technology to remain cost- efficient.
09/09/18 Lalatendu Mishra/The Hindu