Why the aviation sector is bleeding?
Monday - January 13, 2020 1:50 pm ,
Category : WTN SPECIAL
WTN- This is the toughest time the Indian aviation sector is going through. In the last nine months alone, the cumulative losses of airline companies exceed Rs 7,000 crore, which is said to be the highest loss in the last five years. The biggest loss suffered was by the beleaguered Air India, which sank Rs 4,700 crore, which was followed by Vistara, losing close to Rs 1,000 crore. Air Asia lost Rs 750 crore approximately in the same period.
The surmounting challenges before the aviation sector is to scrape through the general economic downturn and manage the rising cost of aviation fuel. It has happened several times that companies had to ground their planes for want of fuel. High government taxes and aggressive fleet expansion moves by many companies further affected profits, even as passenger growth failed to notch double digits in 2019. Surprisingly, it was only Air India subsidiary Air India Express that showed an operating profit of Rs 459 crore even amidst the gloom.
However, in general, the higher ticket prices companies are setting to offset their acquisition and operational losses, is hurting passenger sentiments, especially when the economy is not doing its best. Many people are shifting loyalty to trains or their personal vehicle for cheaper and more convenient travel. The services of most airlines are faltering, which is another reason for losing people’s trust on them. GoAir is grappling with the problem of plane shortage and snags hitting many of its aircraft. Jet Airways wound up last year unable to wriggle out of the debt burden. Air India is under heavy debt and may not be able to sustain for long, even as its pilots are quitting en masse.
We have seen the debacle of Kingfisher, Sahara Airlines and Air Deccan in the past. Fog and inclement weather during the winters lead to inordinate delays and cancellations, which is again a dampener for travellers. Most airlines are so much into their expanding spree that customer grievances are not addressed promptly or effectively. Often there are complaints of highhandedness of airlines staffers and unprofessional approach. Snags, near hits and misses, emergency landings, mid-air scare, fires, etc. have grown in frequency and this too is affecting airline operations and customer satisfaction.
There are multiple issues plaguing the airline sector. Experts even feel that a right balance must be struck so that supply doesn’t exceed demand. Riding on unrealistic hope and optimism, airline companies are expanding beyond their means and later plummeting. Flying with empty seats is the last thing companies want, but occupancy rates are falling in several sectors, which is a direct assault on revenues. Delayed payments, truncated salaries, appointment freeze etc. are seen as short-term measures that companies resort to, as they only come to affect performance and thus further hit profits.
The government needs to discuss and find ways to bail out the companies from this piquant situation. Lowering of taxes or giving easy loans or other palliative measures for sustaining the companies need to be taken soon before the loss is too damaging for the aviation industry to survive. - Window To News
