Three Major Events To Shape The Future Of Indian Aviation Industry The aviation industry, the third largest domestic aviation market in the world, will soon be shaped by the launch of Akasa Air, revival of Jet Airways and the possible integration of Vistara with Air India
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The sky is all set to witness the clash of the titans. The civil aviation industry in India has emerged as one of the fastest growing industries in the country during the last three years. According to a report India has become the third largest domestic aviation market in the world.
Soon, the future of the industry will be shaped by three major events:
Launch of Akasa Air
Akasa Air, the low-cost carrier (LCC) airline, backed by Rakesh Jhunjhunwala and co-powered by aviation veteran Aditya Ghosh is preparing for a launch in July.
To support the growing demand across India, the carrier plans to offer commercial flights starting in the summer of 2022.
"Akasa's youthful personality, employee- centric philosophy, tech-led approach and culture of service will make this commitment a reality for all Indians. With a commitment to being socially responsible, Akasa Air has placed a firm order of 72 Boeing 737 MAX family aircrafts, which will deliver superior efficiency in reducing fuel use and carbon emissions, fulfilling the airline's promise of being an environmentally friendly company with the youngest and greenest fleet in the Indian skies," the company said in a statement.
Recently, the company welcomed the arrival of the first of its 72 Boeing 737 MAX aircraft, at the Indira Gandhi International Airport.
Revival of Jet Airways
The full-service carrier was synonymous with premium air travel and had a glorious past of ruling the sky. Faced with fierce competition from India's low-cost carriers, the airline lost much of its market share,revenues and finally in April 2019 it suspended all operations.
The company underwent a corporate insolvency resolution process under the (Indian) Insolvency and Bankruptcy Laws in April 2019. After several rounds of bidding, the Jalan-Kalrock Consortium emerged as the successful resolution applicant for Jet Airways in June 2021.
On May 20, Jet Airways received its revalidated AOC from the DGCA giving it a new lease of life. Led by seasoned industry professionals, Jet Airways is set to take a jet ride in its new avatar as a people-focused and customer-friendly airline, updated for the digital age.
Great Indian mergers
The Tata Group in January regained control of Air India after sixty-nine years. Now, according to reports, Vistara could soon merge with Air India. Vistara is a joint venture of Tata Sons Pvt. Ltd and Singapore Airlines Ltd (SIA), wherein Tata Sons holds 51 per cent stake and Singapore Airlines owns 49 per cent stake.
According to The Indian Express, Tata Sons has held exploratory talks with Singapore Airlines (SIA), its joint-venture partner in Vistara, for a potential merger of the airline with Air India.
The Singaporean carrier has asked for a period until the end of 2023 to come to a conclusion as to whether it would permit such a move, quoted a report. "The Tatas and Singapore Airlines discussed the merger possibility earlier this year. SIA had even agreed to join the Tata bid for Air India, but because of the pandemic it decided to back out given its poor financial condition," the report added.
Akasa Air is powered by Aditya Ghosh, an aviation veteran. He was the president and the whole-time director of IndiGo airlines for a decade till 2018. Before that, he was group general counsel for interglobe enterprises. Under his leadership IndiGo garnered a massive increase in market share and customer satisfaction.
At a time when the aviation industry is set to witness strong competition, Ghosh's expertise in the field can boost Akasa Air's performance and help it become a market leader.
The domestic passenger traffic has grown approx 83 per cent on Y-o-Y basis in April 2022 and is only 5 per cent lower compared to April 2019 (pre-Covid level) , said a statement by ICRA.
As the industry is opening up again, better customer experiences can help the players emerge as a leader.
While Jet Airways was always known for its opulent services it would be interesting to see what new it brings to the plate. Meanwhile, the possible integration of Air India and Vistatra will bring efficiency in optimal utilization of resources and the synergy would boost customer experience. The sky is now a battleground for the titans to perform.