The recovery is so spectacular that Indian aviation industry has emerged as one of the fastest growing aviation markets globally thanks largely to India's excellent economic growth which is pegged at 8.75% for the current fiscal by the government. With economic recovery in full swing, the consumer spending on travel too has gone up rescuing the airlines industry that was staring at bleak future not long ago. According to one of the aviation experts, 2011 will be much better with passenger traffic likely to reach nearly 60 million from 45 million in 2009.
Most of these loss making airline operators have left behind the turbulent period of surging operational costs, excess capacity and unruly competition. Now they reach more domestic destinations hitherto unheard of besides targeting the lucrative Gulf sector, Saudi Arabia in particular. The Gulf was the sole monopoly of the national carrier Air India a few years ago. But that has changed. Jet Airways, the private airlines for example, now flies to Manama, Doha, Abu Dhabi, Dubai, Sharjah, Kuwait, Muscat and three destinations in Saudi Arabia: Riyadh, Jeddah and Dammam. Kingfisher Airlines, a new entrant in the overseas market, has introduced flights to Dubai from Mumbai and Delhi.
"The challenge is to increase and retain the market share and the Gulf is the lucrative sector since one can take advantage of near full capacity all the time of the year. You get the international benefits for a flying time of just about three to four hours from India", say sources in the Jet Airways.
However, the competition on the international routes, particularly on the Gulf segment is expected to get stiff with entry of more private players such as Spice Jet and IndiGo in the near future as they too are on massive expansion mode.
Given the optimistic future, the government has decided to infuse ailing Air India with INR 12 billion a few days ago.
"This is the second bail out after INR eight billion given to them in February 2010. If AI cannot get out of its sickness in next few years, they will never", says an aviation analyst pointing out that some private airlines have already turned profitable, albeit in a small measure.
Despite the positives, all these airlines, whether owned by government or a private operator, cannot take good prospects for granted. The price of crude oil which recently hit $90, may spoil the party in the coming years.
