MyVoice: Views of our readers 3rd July 2021

Is the aviation sector reviving?

When the Indian sky got wounded with financial injury due to inefficient aviation operation leading to bleeding of the balance sheet of all companies, it was thought to be recovered with government intervention with some significant policy change. Alas, the sector hits another roadblock of pandemics, making it more challenging to come back soon. This aviation industry was neglected for a long time, and many business innovations could not give the required fillip. Class to the mass transformation of this segment increased the traffic, though, but the balance sheet did not recover and rather became further worse.

In the last couple of decades, we lost many airlines from Vayudoot, Damania Airways, King Fisher, Sahara, Jet, Deccan, Paramount to East-West. The list is too long if we include many other small regional players too. The reason for failure was never reconciled by the ministry of aviation in India. It was always thought to be a cash cow, and therefore this sector is heavily burdened with operational costs, right from fuel, lease rental, unnecessary hovering above destination runway, exorbitant parking fees, and so on. All put together; it was never a good business opportunity. The passenger, on the other hand, is very price sensitive. The fares are constantly under the pressure of losing customers. Airline service being an intangible product, service quality is paramount and therefore provides less elbow room for reducing cost.

An alternate mode of transport is the railway that too, without exception suffering from service quality and commercial viability. Even AC first-class coaches are way behind people's expectations. Sometimes corporate honchos prefer overnight travel by rail to save on hotel accommodation costs. But the unacceptable service quality makes it less preferred than air travel. Adequate government intervention for service quality improvement may bring in some positive movement, but a paradigm shift is required to the railway management mindset.

Aviation, on the other hand, needs a commercial tax restructuring to make its business model sustainable. It will be a potential business opportunity segment to attract many business leaders to invest. The failure of Sahara, Kingfisher & Jet was not their mistake alone. These companies were pursuing the government to restructure fuel costs hitting their bottom line. Flights were hovering above the destination airport, wasting costly fuel need be addressed during peak hour. Now the reappearance of old aviation partners with the number 9W is bringing a turnaround sentiment in the Indian economy. It seems the fate of the Indian economy is coming back with a good fortune with two positive news which is coming back of 9W & PMC bank.

S K Nag, Mumbai