Aviation Industry in India finding it hard to keep afloat

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The world is hotly debating on axing Boeing 737 Max 8 following the March 10 crash of an Ethiopian Airlines flight that killed 189 people onboard and another crash that took place in October last year involving a Lion Air flight that plunged into the Java Sea, killing 157 persons. The grounding is expected to cost Boeing billions of dollars as many airlines have announced that they won’t fly the planes until they know more about the circumstances surrounding the crash. In India, thousands commercial Pilots who are already under stress are worried about the security of their job.

Around 16,500 employees of Jet Airways have written to the Aviation Ministry, expressing their apprehension regarding the safety of the flights, as they have not been paid for months. Many have even mortgaged their family properties or jewellery to keep their both ends meet, whereas some have postponed their marriage while most are contemplating to shift their job.

Although there is a proposal to infuse Rs 1,000 crore into Jet Airways, industry observers said this move may prove to be too little too late to save the airline as it might require at least Rs 10,000 crore to stay afloat. According to industry estimates, Jet Airways’ total debt of Rs 8,000 crore in addition to payables such as vendors’ dues worth Rs 15,000 crore, would require something more substantial than just Rs 1,000 crore that a consortium of public sector banks might muster up.

The airline has lost ground in terms of market shares, even as its pilots and crew are said to be approaching other airlines for employment. The industry reaction comes even as the airline’s case is being viewed by top government officials, as the prospect of 16,500 employees of the airline losing their jobs ahead of the general election might just push Public Sector Undertaking (PSU) banks to extend a lifeline till they find another investor.

Jet Airways crisis is not the first in India. The low-cost carrier Kingfisher Airlines Limited’s case is well documented and the problems of Air India keep surfacing time and again in media; all stated that they could not pay their respective employees. If Jet Airways also goes the Kingfisher way, one can imagine the shortage of flights. As the demand for flights keeps increasing day by day, any more grounding of flights will surely result in chaos, like that of the Railways.

Civil Aviation Ministry and the State governments of the North Eastern (NE) region are leaving no stone unturned in their bid to develop Air connectivity in the land-locked states but have failed so far, as most of the private airlines refuse to serve the sector under the pretext that these routes are losing sectors.

As per the studies conducted, over 40 percent of the population from the NE avail air services, while just 10 per cent of the so-called mainland population use air services, but the footfall is smaller from the region as it is thinly populated. The private airline services only see the total number of tickets sold, which adds up to be smaller than the mainland air tickets. Taking advantage of the amended RDP, the airline companies are gradually reducing their services from the region.

Over all, be it the crowded sector or the losing sectors of the North Eastern region, the flights are dropped due to non-payment of salary or less passengers respectively. All this only exposes the detrimental guidelines of Aviation Industry whereby the Airlines’ operators keep incurring heavy losses and find it a challenge to keep afloat.

The new government to be installed after the Lok Sabha elections should stress on the Civil Aviation Ministry to work out a healthy policy to promote sustenance of airlines, be it the subsidies on fuel or its insurance. Also, the safety of the passengers should not be compromised as it tries to keep the services afloat.