Monday, October 14, 2019

Why Do Indian Airlines Keep Failing?

Since 2014 India has been the fastest-growing economy in the world, surpassing China and maintaining an 8% GDP growth rate every year. India’s pace of economic growth has been at least 6% per annum since 1991, and with the second largest population in the world, coupled with a growing middle class, you would be forgiven for thinking that one of the world’s fastest-growing aviation markets had a more positive outlook.
With the bankruptcy of Jet Airways earlier this year, and Kingfisher Airlines having their air transportation licenses revoked in 2012, the past decade has seen two of India’s major players fall at the wayside. Incredibly, that leaves India with just two full-service carriers. The long-standing Air India, and the newly established Vistara.
With a population of over 1.3 billion people, Air India’s fleet of 136 aircraft by no means make them a comparatively large airline. When compared to the 3 major US carriers with nearly 3,000 aircraft between them and a population of less than one-quarter of India’s, there seems to be a huge gap in the Indian aviation market. Similarly, when pipped against the rapid growth of the three major Chinese airlines, who have 2,000 aircraft between them, the question has to be asked; with such a large population and increasing demand for air travel, why do we keep seeing Indian airlines fail?
The pressures on the Indian aviation sector can be attributed to rising fuel prices and the Indian rupee depreciation in part, however, the elephant in the room has often been government intervention in the sector, and the continued protectionism of Air India, which is now just one of two full-service carriers left in India.
14/10/19 James Asquith/Forbes
To Read the News in full at Source, Click the Headline

0 comments:

Post a Comment