Aviation war Sometime Away Air India A Spoiler

Aviation war Sometime Away Air India A Spoiler

India will have six new Airlines before the financial year ends apart from the existing Airlines that continue to report losses every consecutive quarter. However, any bloodbath in this space is still some time away believes Ajay Singh, Former Director SpiceJet. Kapil Kaul, chief executive officer India Subcontinent, Centre for Asia Pacific Aviation adds that the full impact of the latest entrant Vistara will be felt in FY16. The market continues to be very challenging for the industry. While there are some early
signs of easing like the possibility of lower ATF prices and the rupee stability, these are only temporary,adds Kaul. Where are carriers going wrong Singh says getting the right business model for an Airline is of utmost importance now as it is getting difficult to run an Airline successfully. Fly fewer destinations but fly with full capacity and fly on time. Airlines need to learn how to attach costs, he adds. Singh, however, also has a suggestion for the government- treat aviation as more than mere luxury and take a holistic approach towards the industry. AirIndia is the market spoiler in the sector. It can make whatever losses, and it will be funded. With AirIndia its fares don’t need to be rationalized, so we can hardly have a level playing field, he further adds. Below is the verbatim transcript of Ajay Singh and Kapil Kaul’s interview with Latha Venkatesh & Ekta Batra on CNBC-TV18. Latha What is the sense you are getting as a veteran of aviation space or a seasoned observer of this space? Do you think you are going to see the bloodbath, if not as badly as the  Kingfisher way but definitely moving out of this space? Singh Any competition in this sector, already in battle sector is not great news for existing players certainly but I would be surprised if the six licenses which have been given come into operation anytime soon. However, for them to come into operations, they will have to prove to their investors that they have a model which works in an industry where most Airlines today are losing money other than IndiGo. So, for them to explain this to the investors and get themselves funded and get operational that is still some way off.
 In terms of sector of course in the longer term continue to be attractive from the point of view that very few Indian still fly and the sector is bound to grow. If you follow the path of any country which has grown like India is expected to grow over the next five years, you will see that the space is immense and if people get their models right, they can still find a great deal of success in this market. So, the bloodbath is still some distance away.

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Mohini Porwal [ B Sc]
Trainee News Editor
Indian Aviation News Editor