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Your Vacation Travel Checklist Must Now Include Vaccine Passport. But, It’s Easier Said than Done

Indian Airports Need an Upgrade, but Next Round of Privatisation Faces Unique Challenges

The rising traveller numbers only speak of volumes. What is more concerning is the quality of revenue emanating from the demand. The quality of revenue has definitely declined and is attributed to the decimation of business travel.

Metro airports continue to be key to aviation traffic with about 61 percent of the domestic traffic and 73 percent of international traffic originating from the six cities.

India’s approach towards aviation industry worked in light of the Covid pandemic induced lockdown.

As rumours abound about a potential Tata group investment into Air India, questions have started to emerge into the group’s entry into the airline business itself.

As the country continues to focus on connectivity initiatives, regional airlines are yet to see traction. The regional airline landscape is evolving and unfortunately has seen very few successes.

Boeing reported a $400 million dollar loss for the third quarter alone and for the first time in two decades they revised their market forecast.

Until the beginning of this year, India’s aviation sector was on a rapid ascent.

Supersonic flights may very well change the face of air travel

India prides itself with producing some of the best engineering minds and technical talent.

Aviation industry stakeholders are screaming for solutions, and the need to build India’s aircraft leasing and financing infrastructure has never been more urgent.

As investors sought diversity, aircraft emerged towards delivering consistent returns and grew to be a very attractive asset class.

As investors sought diversity, aircraft emerged towards delivering consistent returns and grew to be a very attractive asset class.

With the acquisition of a 74 per cent stake in Mumbai International Airport Limited (“MIAL”), the Adani group is now the largest airport operator in the country.

Airports are strategic assets for the nation. By their very nature, they drive output, employment and connectivity impacts. The connectivity, in turn, lends itself to improving tourism, trade, technology, transport and talent.

What started as a descent at the beginning of the year has become a nosedive.

Mumbai, India’s commercial capital, contributes over 20% to Maharashtra’s GDP. An important city by many measures, it accounts for 16% of India’s total airport passenger flows, 28% of total air-cargo flows and 15% of total aircraft movements.

As the coronavirus pandemic continues, India’s airlines are one of the most affected. Liquidity is constrained while losses are building up.

An ethnically, culturally, and geographically diverse region, North-East India is connected with the rest of the country through a narrow corridor of approximately 21 kilometres.

India’s oldest private airline, Jet Airways, announced the suspension of operations last year. After 26 years of operations, the last flight flown was from Amritsar to Mumbai at 10.30 pm on April 17, 2019.

A GDS system is like an online store where inventory (namely: airline seats and schedules) are displayed electronically.

OTA’s that can successfully pivot may be able to weather the storm. Others may be forced to consolidate or shut down.

As Indian aviation struggles through what may be its greatest challenge to date, aircraft lessors will face challenges.

With the tax policy changes, India’s MROs have for the first time been able to start to see light at the end of the tunnel. Significant Capex coupled with additional policy alignment is still required. As these issues are gradually addressed, MRO’s in India’s may finally take-off.

Airport investors face a turbulent flight-path ahead.

For airline planners the challenge is to look at a broad set of parameters that do not necessarily correlate and discern trends.

Confidence building measures or CBMs came into the lexicon during the cold war era. These were steps towards minimizing tensions and building trust between nuclear powers.

The current narrative assumes that the new-normal builds on the old base and old ways of travel which will by all accounts be more cumbersome. But with innovation, there could be another reality: where the new normal may very well be more pleasant than the old ways of travel.

For airlines this means revisiting entire network and fleet plans and adapting to the new reality. Above all, the hub concept will need to be adapted.

Earlier this year the government laid out the ambitious plan to develop hundred regional airports. This in conjunction with an infrastructure push, and towards connecting all parts of the country.

Indian aviation has witnessed exponential growth over the last decade. The financial year 2018-19 saw 275 million travellers, 2.5 million air transport movements and 3.5 million metric tonnes of cargo move in and out of Indian airports.

India has witnessed tremendous aviation growth in the past decade. Airports are bursting at the seams and the capacity lags far behind demand.

When it comes to understanding the success of Indian aviation, the consequences of using stand-alone metrics may make the final analysis inconsequential.

The true value of the airline can only be established by examining the parts as stand-alone entities.

Air India has reported a loss of Rs 8,640 crore for the 2018-19 financial year despite a domestic marketshare of 12.9 percent and an international marketshare of 68 percent.

The 321s give the airline 19 percent additional capacity per flight with economics that are still competitive.

IndiGo is no longer content being the dominant domestic airline in India and is steadily positioning itself to become a major player in the international segment as well.

Delhi airport final project cost was 3.8 times the initial estimate and in the case of Mumbai it was 1.7 times the initial estimate.

With IndiGo’s latest shopping trip for 300 Airbus planes, India’s airlines collectively have 1,200+ aircraft on order — more than double the existing Indian commercial aviation fleet.

Boeing now faces a huge strategic challenge because the issues may essentially spill over to more than just the 737 Max

The completion date for the first phase had already seen a five-year delay and was pushed to the latter half of 2030.

Airlines, after all, require large amounts of capital for day-to-day operations.

Till date, the capacity expansion at Indian airports has mostly focused on the terminals.

Currently, approximately 61 percent of the domestic traffic and 73 percent of international traffic still originates from the 6 metro cities of Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata, Chennai and Cochin.

Up to 80 percent of the current commercial aviation Indian fleet is leased.

Indigo’s fleet strategy has been one that combines pricing power by volumes coupled with a sale and leaseback financing mechanism.

The sad fact is that for the amount of money that has been put into Air India, a new airline could be established.

Owing to a string of disconcerting events — lessors’ repossession of aircraft, defaults including breach of debt covenants and multiple resignations — Jet Airways is a shadow of what it used to be.

India’s airlines have been on a buying spree. But their ability to finance these aircraft, the ability to induct the aircraft and the ability to dispose of these aircraft presents a very different picture.