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World still swears by Indian aviation

india Updated: Apr 02, 2012 02:01 IST
Tushar Srivastava
Tushar Srivastava
Hindustan Times
Highlight Story

Top global aviation industry bosses are bullish on the future of Indian aviation industry despite the fact that top five of the six domestic carriers are bleeding heavily and are likely to post a record $2.5 billion (Rs 12,500 crore) loss in fiscal 2012-13.

"When you see what’s happening in terms of profitability of some of the carriers in India, it is of quite concern to us," Kiran Rao, executive vice-president, sales & marketing, Airbus told HT.http://www.hindustantimes.com/Images/HTEditImages/Images/02-04-biz-04.jpg

Airbus, the European aviation giant, is the dominant player in India’s commercial aircraft market with around 70% market share.

“The issue in India is that the yields have not kept up with the increasing cost of fuel, raw material, airport charges and other things,” Rao added. “Its not a question of bad management or strategy. We believe in them (Indian carriers) and their business models.”

Julie Southern, chief commercial officer, Virgin Atlantic, said there was no fundamental reason why Indian carriers could not make money when airlines around the world were making profits. “If you think carefully about your business model there is no reason why aviation cannot be successful,” she said. “India is a big market. People want to travel and the middle class is growing enormously.”

Government policies, Rao said, had to be tailored. “Somebody within the government has to look at aviation now and stop looking at it as just a luxury for a few but look at the fact that aviation is very much a part of India’s growth story and if you don’t have a aviation network in place then India won’t have the growth story in place.”

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