- According to CAPA, the Asian-Pacific Aviation Consultancy Centre, the airline industry of India is in the critical condition due to the ever increasing losses. Now, about three airline companies are expected to declare a collective net loss of $1.2 billion for the year.
- The loss of 700 million dollars by Air Indian (AI) is quite close to what CAPA had estimated, which is around 750-800 million dollars
- In Indian Aviation Outlook-FY2015, CAPA stated that SpiceJet and Jet Airways are expected to report the record losses, in spite of showing 20% improvement in the local currency, year on year.
- In past 7 years, which is till the end of 2013 financial year, the airline industry reported the total loss of 8.6 billion dollars, and the debt of the industry had shot up to 12.6 billion dollars.
- CAPA estimates that the airlines will need the capital infusion of about 1.6 billion dollars in next 12-18 months, and out of which AI will need 1 billion dollars to continue finance its basic functioning.
- As Air India will need more finance to keep it functioning, CAPA believes that the new government would probably think of privatising the company. The funds requirement of AI had surpassed the earlier government commitment.
- According to Captain G.R. Gopinath, the founder of Air Deccan, the Government’s flawed policies are responsible for huge losses, which have incurred in the past. However, most of the airline companies are suffering only due to their internal issues.
- All the airports are owned by the government and the service charges levied on the carriers are extremely high. This is one of the major reasons why the airline companies are unable to breakeven.
Exams Perspective:
- CAPA
- Government of India’s Civil Aviation policy