As Covid curbs recede and business and tourist travelers – cooped up for two years – find their wings, one can see air ticket prices slowly creeping up and airlines cashing in on the mad rush. There is the flip side too. A slew of airlines are hitting the skies, and will hopefully challenge the monopoly of Indigo Airlines. For the air passenger this means cheaper tickets and better connectivity.
Jet Air, which has been grounded since April 2019, is on revival track, and after its first flight in mid-May this year, has been granted an air operators permit (AOP) by the Director General of Civil Aviation (DGCA). Most industry watchers have been skeptical whether Jet would ever fly again. But after a few missteps, the new owners – Murari Lal Jalan, a Dubai-based businessman, and Florian Fritsch of Kalrock Capital – are pumping in $180 million to pay off old dues and acquire new aircraft.
Akasa Air, promoted by stock broker Rakesh Jhunjhunwala, is also sprinting to take to the air. Old Delta Airlines hand, Vinay Dube who now heads Akasa Air, expects to receive its flying permit as early as this month, and will begin selling tickets and scheduling flights soon after. Being a new airline, Akasa will have to stick to domestic routes for some time.
And finally there is the old heavyweight, Air India, whose ownership passed to the Tata Group in January this year. The group has 3 airlines in its bag now – Air India, the premium Vistara, and Air Asia – with a collective passenger share of around 24%. Air India hasn’t bought a new aircraft since 2006, and therefore its whopper order for 300 planes, is possibly a record for the industry.
The airline business is not a very pretty picture. In the past 15 years, as many as 17 airlines have folded up; of these, two airlines Air Odisha Aviation and Deccan Charters exited in 2020 after the Covid lockdown. Air India’s debt, before it was sold to the Tata Group, had ballooned to Rs 60,000 crore.
The pandemic, which suspended air travel March 2020 onwards for nearly 18 months, took a severe toll on the industry. Airlines cumulatively reported losses of around Rs 19,500 crore while airports took a loss of more than Rs 5,120 crore. These figures should have dampened the enthusiasm of the new players; but the post-pandemic air travel rush is now being seen as a sizeable window of opportunity.
03/07/22 Gurbir Singh/New Indian Express
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