The aviation sector is competition between the Government-run airlines and Air india.Air india is responsible for major international
routes while indian airlines are for domestic routes only. both of them are merged in 2007 to operate under Air India Cap.
But in 1992 P.V Narasimha Rao led government issues seven private operator permission and like of Sahara Airlines,
ModiLuft introduces a new domestic route travels to Indian's.However with no proper understanding for running profitable airline brings unexpected and inexplicable changes in cude oil prices which result in airline to shut some of the routes. By the end of 2005 only Jet airways and Air sahara survive.
In 2006 a new entrant IndiGo is the market leader with a low fare model. During that period Naresh Goel (promoter of Jet Airways)
acquired Air sahara for $500 million which is biggest M&A deal in the aviation sector. However Liquor baron Vijay Mallya who launched Kingfisher airlines in 2005 bought Air deccan. Both the aquisition truns out as a disaster. In october 2012 in a dept of INR 8,000 crore operation of Kingfisher airlines suspended operations and Mallya fled to UK which shakes the economy of Indian Banks.
In April 2019 Last private airline Jet airways shut down their operations because of financial crunches.
Expert Jitender Bhargava Executive director of Air india says the merger of two airline is kind of perforce one.
The operational cost of industry is quite high given the steep taxes on turbine fuels, parking charges and other bit one.
Being a low yeld hight cost market Today there are seven operational airlines whith IndiGo having market cap of 48% as of sept 2019.
The aviation industry is now a stable industry with few players because others are not able book privilege of profits said by Harish HV,
managing partner,ECube investment Advisors, an environmental social and governance fund. IndiGo and spiceJet both low-cost airlines,
no other is profitable in sept Quarter of FY20 evn IndiGo reported a net loss of INR 1,062 crore.
Expert says merger is not necessary a sign of maturity because if they were to show a sense of maturity they would not sell the seat
below the cost of producing a set. that is for sure will led to loss and market disruption. even consolidated airlines are not even thinking of breakeven atleast the breakeven sense for selling seats should be applied by the experts.
A new Enterant in market Akasa Air founded by Stock trader Rakesh Jhunjhunwala would also lead to great disruption of
Indian aviation sector which is possibility to be felt from FY24. Akasa air may would start their operations from
Mid FY22 and might penetrate the market in coming year or two.
We believe that industry stakeholders should collaborate with policy makers to implement efficient decisions
to boost the aviation industry with the proper implementation of policy relentless focus on cost and passenger interest would make indian aviation
sector to achieve its point where it is supposed to be in FY 2022. The travel market in India is US$ 75 billion and is supposed to
cross 125 billion in inFY 25 so opportunity is more in coming time but only needed is proper policies that engage the passenger
interest with effective cost and flawless experience among travellers.
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