Naresh Goyal, Chairman, Jet Airways speaks to
about the potential and viability of aviation sector in India.
Where is the Indian aviation sector headed?
The potential is huge as disposable income levels of the expanding middle class are rising. But the 40 per cent growth in passenger traffic can’t be sustained. This has been proved in China and India is no exception. In 2006, China recorded passenger traffic of 160 million and the number grew by 15 per cent to 185 million in 2007.
But this year the figure could be maximum 210 million, a growth of 10 per cent. The passenger traffic in India suddenly went up because of the entry of new players and cheap fares they offered. The cost of running an airline is so high that it does not make sense for anybody to operate a ‘low cost, no margin’ business. Jet Airways is in this business to make money and I don’t have any other business to bank on. It is not in the interest of our shareholders to run a loss-making airline by offering tickets at prices below the cost.
Where in the value chain is India now?
Basic infrastructure to support the aviation industry’s growth is not yet in place. The government is making efforts. But our pilot training institutes and training schools for engineers and technicians are not equipped to handle the pressure, prompting many to go abroad to gain the skills. We are also hiring hundreds of expatriate pilots, engineers and management personnel including CEOs to run our airlines. And though the number of aircraft and flight movements grew suddenly, our airports were not upgraded to handle the traffic load.
Where can it go from here?
In 1993 when I started the airline, people thought I was crazy, but I proved my critics wrong. Indians are hospitable by nature and our service standards will help us to emerge as preferred carriers for passengers around the world. Fares will go up, and some financially sound players will survive. There is huge opportunity in cargo as well.
How acute is the skill shortage?
Today, there is acute shortage of trained manpower in every segment, be it pilots, engineers and cabin crew. Since we are the oldest airline in the private sector, other Indian carriers constantly look at us to hire trained manpower. I am happy to say that Jet Airways has contributed substantially to the overall growth of the aviation industry.