Heavy crisis on India's aviation industry, Go First not the last Indian airlines to go bankrupt? - Newztezz - Latest News Today, Breaking News, Top News Headlines, Latest Sports News

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Tuesday, June 27, 2023

Heavy crisis on India's aviation industry, Go First not the last Indian airlines to go bankrupt?

A country like India, which is one of the world's largest aviation markets at $10.8 billion or Rs 1,089 crore, is facing a strange paradox. The number of passengers flying here is increasing, but the number of airlines is decreasing.

After the restrictions of the corono virus epidemic, once again the Indian aviation sector is witnessing fresh turmoil. The enthusiasm in this area has been for a very short time. Because now GoFirst Airlines has declared itself bankrupt and has stopped the flights. This has reduced the number of airlines in the country. Because of this, passengers are being forced to pay more.

A country like India, which is one of the world's largest aviation markets at $10.8 billion or Rs 1,089 crore, is facing a strange paradox. The number of passengers flying here is increasing, but the number of airlines is decreasing.

Ticket prices will increase further

Another reason is increasing the nervousness of the people traveling in the plane. That is the dire situation of surrender of low-cost airline SpiceJet, if it happens, ticket prices will increase further due to limited number of airlines. Let us tell you that the future of SpiceJet is also uncertain. Then what are we left with? Unfortunately, we'll be left with Monopoly. Because of Monpoli, the next step is to increase the prices of tickets. Government intervention is one way out but the cost to the airlines is very high and hence it is a difficult situation for all involved. Karthik Malhotra of News9 Plus says, huge demand and limited supply are further disturbing the balance.

Airbus is also facing problems

For example, on the most frequented Delhi-Mumbai route, the average ticket price has increased from 6125 to 18654 from May to June. Delhi-Pune has increased from 5469 to 17220 in the same period. Mark Martin, aviation expert and founder-CEO of Martin Consulting, pointed out that what we are actually seeing are signs of a worsening state of the aviation sector. The problems we've seen recently with Go First extend to the Airbus A320NEO, which in turn is based on a completely new design of an engine that hasn't really been tested or proven to be effective in our environment. Has happened.

25 airlines around the world affected

Martin told News9 Plus, "The problem does not affect Go Air only, but affects about 25 airlines around the world." With legal problems and some Indian airlines facing bankruptcy quagmire, Bharat Kumar of Saikrishna & Associates explains the predicament they find themselves in. He said that once the bankruptcy process starts during the initial stage, it remains only to issue notices.

Payment to companies and banks

According to this, it is like running a company in which they see who has to pay how much. There will be many people who will have to pay. By people I mean companies and of course banks. So that whole line is drawn and then later, if the company is able to pay that money, then only their assets are sold. Lenders also have to take a cut. So it takes some time.

What is the benefit of new airports?

What is the benefit of setting up new infrastructure or setting up new airports under UDAN scheme? Or trying to attract low cost airlines or FDI in aviation at a time when those smaller airports cannot be served? You have cases of starting airlines for small regions, taking some flights, carrying 100 passengers every day to these small airports. But what is their survival rate? Can any of these airlines survive even a year in operation? In many cases, unfortunately, the answer is no.

Don't succumb to the bad habit of profiteering?

So the point is simple. You are investing in infrastructure, but what about actually creating an environment where airlines can make profits but don't succumb to this bad habit of profiteering? so that is the disconnect. You have one sector, where ticket prices are being sold well above normal prices, and you have other sectors, which are not being served by airlines at all.

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