Why India’s Airlines Struggle to Take Off
The same factors holding back the aviation sector are preventing the economy as a whole from achieving its potential.
Cloudy forecast for India’s Jet Airways.
Photographer: Punit Paranjpe/AFP/Getty Images
Anyone puzzled by how the Indian economy manages to grow swiftly while somehow failing to be prosperous could do worse than look at the state of India’s airlines. Over the past four years, passenger growth in India has been rapid: The number of flights taken has increased between 15 and 20 percent per year. Demand growth this year is likely to be the highest in the world. Yet the industry itself hasn’t benefited. Almost every Indian airline is struggling.
Consider Jet Airways Ltd., the oldest private airline in India. It’s suffered losses for three consecutive quarters now; its cumulative current liabilities have climbed to $2.2 billion. The airline is struggling to pay its pilots and has reportedly failed to make payments to the owners of its leased aircraft. It’s even been difficult for it to pay its airport fees. Another airline, SpiceJet Ltd., has been in the red for two quarters and is also delaying its payments to the Airports Authority of India. And even the market leader, the much admired IndiGo, declared a quarterly loss recently for the first time since going public in 2015.