Indian Aviation

A couple of years back the Indian aviation consisted only of TWO airlines – Indian Airlines and Air India. Those were the only two airlines covering the domestic as well as the international market. These airlines were often plagued with long delays and departure at ungodly hours to utilize the aircraft to their fullest. There was no improvement in the soft or the hard product over the years as they had a monopoly over the Indian market. Ticket prices were also at a level which most of the Indians could not afford.

Boom! There was a deregulation of the aviation industry and private carriers could enter, they had to operate for 5 years minimum in the domestic market to be able to offer international destinations. Fair enough to see if the companies would actually survive the difficult market, owing solely to the high fuel prices and of course, India’s famous labor unions.  I am not dismissing the fact that other countries don’t have labor union problems, like the recent British Airways problems, or even the Lufthansa strikes, but in India this problem is unique.

I’m sure most of you have read the papers lately about how Air India (India’s government airline) was unable to pay the salaries of its pilots for over 5 months. Then came in Jet Airway’s decision to slash the new joinees into the airline in order to save costs, then Kingfisher getting its accounts frozen due to lack of funds, hence services were affected. We are talking about the big players in the Indian aviation industry going bust. What made this happen?

I am no expert at analyzing, but my passion for aviation made me just pen down my opinion of the Indian aviation market. I am not going to include the political side to things in the aviation because it is very controversial. But just to put things plain and simple this full service airlines, with a good financial backing have just gone bust.

Personally, I have flown Air India, Jet Airways, Indigo, Kingfisher in the past and having a service level to that of Indian based airlines is second to none! They treat you with warmth, care and comfort, some more than others. Jet Airways is known for their service levels because they are a full service airline, but not to forget Indigo, which is India's number 1 low cost carrier, expect to be treated like royalty even though you have paid less than half of the ticket price compared to that of jet airways. They have new aircraft and on time all the time. Well groomed crew... might sound like im advertising for Indigo here, so im going to stop now. 

Jet Airways was and is a more conservative airline in terms of expansion and advertising. They have been around longer than Kingfisher. A smart move was to open up a scissor hub at Brussels to connect the Indian passengers from different cities in India to different cities in the US, because honestly the market is not big enough to warrant direct flights into the US from India, a case-in-point is Air India itself, operating brand new Boeing 777-200LRs into New York Kennedy and New York Newark airports from Bombay, Delhi, Ahemdabad, Hydrabad and Chennai. What you don’t know while buying your ticket is that they are probably going to route you through Mumbai or Delhi for all flights.

Competition is fierce for the US and Europe market from India, including the giants of Middle East, Emirates, Qatar, Etihad and on a smaller scale, but not insignificant is also Cathay Pacific, Singapore Airlines for the west coast US. Again you also have Kuwait Airways, Turkish Airlines, Egypt Air also fighting for their share of the India-US market.

Gulf Market has always been lucrative for the Indian airlines but alas it’s a low cost market. Air India seems to be making the most money on this market, but now Jet Airways, Indigo (India’s number 1 low cost carrier) have seemed to join the bandwagon. Adding to this, also the middle east giants have come into the picture to cut prices and have a fierce market competition in terms of ticket prices. Air India kicked itself again in its foot by creating Air India Express - a low cost carrier operating to gulf destinations and a few south east Asian destinations. Agree, that they did scale back on their mainline operations, but either of them would be able to survive. Both airlines, on the same rout is a bit of an oxymoron as they will be cutting into their own market share, analyzing the passenger given on any one day either choosing Air India or Air India Express. 

Kingfisher’s owner Vijay Mallya is also a part of UB Brewery – which is the single largest alcohol producer in India. Now after that success they managed to start an airline named Kingfisher, eager to enter the international market, they managed to take over ailing Air Deccan (Indian low cost carrier) and got its license into operating international market. Without looking around it just started expanding into international routes. For example, entering into the Mumbai to London Heathrow and Delhi to London Heathrow routing takes a lot of courage as there are operators that have been there for ages and have not been able to make a profit out of that route.

At one point you had Kingfisher, Jet Airways, British Airways, Virgin Atlantic, Air India all operating on these routes with upto two flights a day or more.  How many flights can this routing support? There is not a big enough market to have so many airlines operating the same route because there is also competition from the likes of Emirates, Qatar and Eithad doing the same routes via their respective hubs and offering a very competitive pricing.

How do you become a millionaire from a billionaire? Start an airline. This is a famous saying in the aviation industry, and I’m sure that is exactly what the Kingfisher giant – Vijay Mallaya has done. By buying out Air Deccan he started digging his own grave. When a full service airlines, attempts to buy out low cost carrier it goes bust. Jet Airways made it work when they started their own low cost carrier Jet Light. But that was from scratch, with no  debt burdens on it. Kingfisher has a way of doing things, and its quite flamboyant. Being conservative might help sometimes, especially in a volatile market like India where the consumer is VERY price sensitive, be it travelling internationally or domestic.

Lesson learnt, the Indian aviation industry will survive through this because the market is big enough, Jet airways has now created a nieche for their market, as Kingfisher’s fleet is grounded, their seats are  selling like hotcakes. Not to forget though, that they are still in the red.

Indigo Airlines, on the other hand, has started booming. They have already hit the black in terms of figures and profits are rolling in. They do have certain unique advantages due to their business model, and it could become the next Air Asia.

Well enough of my ranting on the airlines of India, I could actually go on and on and on about all of this because this is somewhat of my passion. Aviation industry has always amazed me since I was a child. I love taking photographs of different aircrafts, love to see new cities, love to try new carriers, love analyzing on the service levels… and much more. You ask me to speak about aviation at length and I probably would be able to do it!