flights fuel to delight
in the years 2020 and 2021, the sky looked cloudy for airline companies. the pandemic had deepened their financial troubles. the flight schedules were in a disarray, and existing players were struggling to cope. but, after a long lull, the skies clear blue once again.
India is gearing up for some star-studded inductions in its civil aviation space this year. Rakesh Jhunjhunwala’s Akasa Air is all set to take flight in July. prepping for a superb take-off in 2022, all major air carriers, established and new, are upping their game in this ultra-competitive space. and for this to materialize, a stellar runway of high tech, customer comfort, and fleet upgrade is already in the making.
this respite is much needed since aviation space is already on very wobbly, weak grounds post-pandemic. incurring a loss of about $4 billion in FY22, many think of this industry to be fraught with challenges. and rightly so.
but as this industry sets its aim to soar high, it is the flyers who are going to make the most of this. data suggests that currently, only 4% of Indians actually travel via air. but this is just the tip of the iceberg.
ending a 69 year-wait in January 2022, the Tatas finally welcomed back the severely wounded Air India Maharajah under their wing, for Rs 18,000 crore. bleeding money since 2007 and surviving only on taxpayer money, the formerly government-run Air India had been incurring about $2.6 million in losses every day.
four months down, things are drastically and positively changing. at present, Air India and Air India Express have a collective fleet of 141 Airbus and Boeing aircraft. but investing in personalizing the flight user experience and upgrading fleet tech is high on Tata’s revamping agenda.
in fact, the Indian industrial behemoth is also home to three other major flight carriers, namely Air India Express, Vistara, and AirAsia India. with a 100% stake in both Air India and its sister concern Air India Express, the Tatas hold 51% in Vistara, and 83.67% in Air Asia. hence, consolidating all these major airlines under a single banner is in the pipeline for better synergies.
but IndiGo and SpiceJet are fueling up rapidly as well. offering significant discounts to passengers during summers, the domestic fares have been currently slashed to as low as Rs 2,500. one can book tickets now, at these discounted prices for traveling between July and September. apt, since Indian domestic passenger traffic has revived voraciously, jumping 36% year on year for March 2022.
amidst all this, IndiGo has retained its market leadership, for now. but the scheduled entry of Akasa, a low-cost carrier backed by ace investor Rakesh Jhunjhunwala in July this year can disrupt it all. Akasa wants to tap into the hugely underserved and non-saturated Indian market present in tier-2 and tier-3 cities. in fact, it has already signed up about 120 flight attendants, 150 pilots, and 20 aircraft engineers for this mission.
these seemingly free lunches and discounts come at a time when the aviation industry is seriously struggling to manage its bane — high input costs. this majorly includes aviation turbine fuel prices, which actually make up for 25% of the total operating costs. add to that the leasing and maintenance costs and the upkeep prices shoot up by as much as 90%, even more.
consider this. the refueling cost for domestic airlines has veered up by as much as 90% in FY2022. to top it all, varying levels of taxes don't make the fare picture any prettier. that explains why more than 30 airlines have shut shop since the 1990 liberalisation.
all of this comes at a time when both the Indian and global travel and tourism industries are slowly receding from a historic slump. the covid punch to aviation has been debilitating, and the crazy costs required for aviation upkeep have only made matters worse for these carriers.
but as these airlines delicately maneuver a fine line between managing costs and delivering a superior customer experience, the customers can enjoy it all. from a renewed Maharaja greeting you, to IndiGo delighting you with its services, the sky is indeed the limit.