The aviation industry of India is making skyrockets as the number of passengers is increasing, routes are being extended, and plans of the airlines are high. However, behind this growth, there is a bitter truth, India is one of the most challenging places in the world that airlines can live. Since Jet Airways to GoFirst, thousands of carriers have failed in terms of good demand. IndiGo blues as it is observed today represent more structural issues that have plagued the Indian aviation over decades. The cost of fuel is high, currency fluctuations are unpredictable and competitive pricing is cut-throat. The article discusses the reasons that India remains the Waterloo of airlines and why the IndiGo blues are now more than ever. For Latest Business News.
India’s Long List of Airline Failures
Since the liberalisation in the year 1991, which allowed the entry of private airlines into the Indian skies, the country has experienced more failures than successes. More than twenty-four airlines have gone under, East-West, Damania, NEPC, Sahara, Kingfisher, Jet Airways, and GoFirst. Their accounts explain why the IndiGo blues today are not a one- time event but are a historic trend.
The monopoly of air India and Indian Airlines was inflexible before the 1990s. Between 1991 and 2001, private carriers came in with a lot of zeal in the hope that they would introduce the Indian passengers to global service standards and competitive airfares. But ambition soon hit on the facts of economics.
The First Wave: Great Start, Fast Decline
In 1992 East-West Airlines became the first Indian scheduled airline operating privately with Jet Airways, Damania, Modiluft, and NEPC as the successors. They brought in modern jets, good fares, and improved service but most of them failed within few years.
East-West became victims of crises and price war. The premium short-haul model that Damania operated was unsuccessful since fares were not enough to cover the cost. When the rupee went down in the 1997 East Asian crisis, Sahara was in a difficult position, which increased its lease payments. Lufthansa repossessed its aircraft overnight and Modiluft died within three years after a shabby tussle.
There was one thing that bound them together; leased aircrafts, low equity, rupee shocks, and unsustainable pricing. These are identical forces behind the existing IndiGo blues, and as such, it will turn out that the problems of the industry did not actually evolve. a phenomenal boom with the budget airlines in the frontline with low fares and connectivity. The most successful of them are Air India express, Spice Jet and IndiGo, which have served millions of users annually.
The 2000s: A Low-Cost Revolution—and More Collapse
Air Deccan was the first budget airline in India and appeared in the early 2000s. It was its cheap fares that drew in millions of first-time passengers and others such as IndiGo and SpiceJet were inspired by it. However, Air Deccan was later sold to Kingfisher which engaged in the luxury outlay and huge debts that compelled it to implode by the year 2012.
There were also the regional airlines that were at cross roads with thin margins and hurdles to operations like Air Costa, Paramount, Pegasus and others. Even the Jet Airways that used to challenge the graveyard trend closed down in 2019 with huge debts. In 2023, GoFirst was the next airline to ground its fleet following engine failures. These cycles indicate that the IndiGo blues are just the most recent of a series of peaks that is taken up by structural deficits that persist in the industry.
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India’s Aviation Trap: Why Airlines Fail
The same lethal mix is frequently referred to by the industry experts:
1. Highest Fuel Costs in the World: Aviation turbine fuel forms 40–45% of an airline’s operating cost in India—far higher than global In India, 4045 percent of operating costs of an airline is made up of aviation turbine fuel- much higher compared to the world.
2. Cutthroat Fare Competition: Airlines maintain low fares artificially so as to lure passengers at the expense of profitability.
3. Dollar Dependency: Leases of the aircrafts, maintenance and fuel imports are dollar-denominated. A depreciated rupee immediately exaggerates expenses.
4. Zero Margin for Error: A majority of airlines have thin equity and high leasing. Any one disruption, like the problems behind the IndiGo blues can lead them to financial catastrophe.
Such are the circumstances that render India a dangerous, merciless aviation market place the kind where even mighty players might fall.
Survivors Against the Odds
IndiGo is the most robust domestic airline with its disciplined low cost and homogenous fleet. But even it is struggling as new DGCA Flight Duty Time Limitations are affecting operations. The current situation with IndiGo blues proves that no airlines are safe.
Air India is also trying a turnaround with Tata Group. SpiceJet still limps along, and Akasa Air also hopes to not be a victim of the so-called aviation graveyard. But history teaches that more than ambition is needed to survive, it is that India has a structural trap of aviation that must be overcome.
