Battle For The Skies

India’s Aviation sector is bracing for another fight for market share. And the primary protagonists are market leader indigo and the Tata group

- Manish Pant

It is the best of times, it is the worst of times. It is the age of a rally in air travel, it is the age of runaway fuel prices. It is the era of growth returning to Indian aviation, it is the era of high operational costs delaying recovery. In short, we’ll know if India’s airline sector—which contributes an estimated $72 billion to the country’s GDP—flies high again even as the great battle for the skies unfolds in the months ahead.

What’s the big deal? Only 4 per cent of India’s 1.38 billion people have taken a flight to date, so there’s much room for growth. “We believe there is a huge market waiting to be tapped. It has a lot of potential and space for everyone,” says Ronojoy Dutta, CEO of IndiGo, India’s largest carrier. Avers Vinod Kannan, CEO of full-service carrier (FSC) Vistara, a joint venture between Tata Sons and Singapore Airlines (SIA): “The potential it has is very different from most countries in Southeast Asia. The closest perhaps is Indonesia, which is a market of about 250-300 million people, with a lot of young people wanting to travel. But the scale of the Indian aviation market is second to none.”

The father of Indian low-cost aviation, Air Deccan Founder G.R. Gopinath, feels the government should bring in reforms and incentives to make travel affordable and thereby boost the industry: “These incentives and reforms and lowering barriers will have to be done comprehensively across the entire sector—aviation fuel, GST and lease taxes, customs, airports and so forth.”