Indian aviation navigating through one headwind after another

The Indian aviation sector has been navigating through one headwind after another over the past two years. But the last couple of months has been significatly bumpy.

As of July 14, there are 692 aircraft in India, of which IndiGo leads with 283 planes, Air India is at 116, SpiceJet has 87, GoFIRST has 57, Vistara at 56, AirAsia India has 28, and Air India Express has 24.

The total number of aeroplanes in the country is expected to increase by 100-120 every year. But what is to be kept in mind is that as the fleet size increases, the need for more maintenance for smooth operations also rises.

Rakesh Jhunjhunwala-backed Akasa Air opens flight ticket bookings

But this has not been happening, and this is the problem that the industry has been facing for a while now. There have been incidents of engine glitches, windshield crack, smoke in the cabin, and equipment malfunction reported over the last two months across airlines, whether it is SpiceJet, GoFIRST, IndiGo, Vistara or Air India Express.

There have also been employee unrests — from pilots and cabin crew, to technicians — over low wages at IndiGo, GoFIRST, and SpiceJet. The infamous mass sick leave by over 200 cabin crew of IndiGo in early July led to massive delays at the largest Indian airline, with its on-time performance of the day plunging to 45 percent.

In terms of financial health, airlines have seen one of their worst nightmares over the last two years due to weak traffic, unused aircraft, and a bleak revenue environment. The net loss is pegged at around Rs 18,500 crore in FY21, and for FY22, the net loss is expected to be over Rs 20,000 crore.

Also Read: SpiceJet announces 26 new domestic flights under the UDAN scheme

While there has been a recovery in traffic, the numbers have not been able to hold, and the domestic traffic is presently around 70-75 percent of the pre-COVID level.

As a result, while fares are high, they are not really helping the revenue environment as airlines cannot utilise 100 percent fleet due to lower demand. In addition, there is always a steady headwind of heavy taxation on aviation turbine fuel and a weak rupee.

So, broadly there is an issue of capitalisation, and airlines always seem to strengthen their cost-cutting steps.

Also Read: Your flights to London could face delays due to chaos, staff crunch at Heathrow Airport

As far as the civil aviation regulator Directorate General of Civil Aviation (DGCA) is concerned, a recent order said the regulator noticed airlines were not making proper identification of defect causes, there is non-availability of certifying staff for multiple flights, and as a result, airlines have been asked to place qualified engineers at all stations to approve an arriving and departing flight.

Going forward, we can expect more spot checks by DGCA to check for maintenance and aircraft airworthiness, Union aviation minister Jyotiraditya Scindia also recently met airlines and told them to strengthen their ecosystem and more tightening of maintenance norms is also expected.