Indian aviation will have to deal with over-capacity: Ex-AICMD
Indian aviation industry, now in a piquant situation due to falling revenue and high fuel costs, will have to seriously deal with over-capacity on certain routes.
By PTI |
MUMBAI: Indian aviation industry, now in a piquant situation due to falling revenue and high fuel costs, will have to seriously deal with over-capacity on certain routes, former Air India Chairman and Managing Director, V Thulasidas said.
Over-capacity on certain routes coupled with intense competition has resulted in falling revenue for the domestic airlines. At the same time, their costs have gone up, mainly due to the unusually high fuel prices. The two together are pressing the airlines from both sides," Thulasidas said.
"The ATF cost in India is much higher. Therefore, the problem in India is much more serious than any where else in the world," he said adding," the domesting airlines will have to look at fleet rationalisation."
The over-capacity in India was not only on domestic trunk routes but also on some international flights, he said, adding," all the domestic air-carriers will have to look at innovative methods to ensure that their revenue is more than the cost."
Cutting down capacity is nothing unusual, he said adding " the excess capacity is a global problem and not just in India."
Because of the falling demand, several US carriers have grounded some of their aircraft. In India, the problem got magnified because this happened suddenly, Thulasidas said.
"Globally also, capacity rationalisation is something which the airlines are resorting to, besides adopting several innovative methods to boost their revenue," he said. "How they do it, is entirely left to them."
Over-capacity on certain routes coupled with intense competition has resulted in falling revenue for the domestic airlines. At the same time, their costs have gone up, mainly due to the unusually high fuel prices. The two together are pressing the airlines from both sides," Thulasidas said.
"The ATF cost in India is much higher. Therefore, the problem in India is much more serious than any where else in the world," he said adding," the domesting airlines will have to look at fleet rationalisation."
The over-capacity in India was not only on domestic trunk routes but also on some international flights, he said, adding," all the domestic air-carriers will have to look at innovative methods to ensure that their revenue is more than the cost."
Cutting down capacity is nothing unusual, he said adding " the excess capacity is a global problem and not just in India."
Because of the falling demand, several US carriers have grounded some of their aircraft. In India, the problem got magnified because this happened suddenly, Thulasidas said.
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"Globally also, capacity rationalisation is something which the airlines are resorting to, besides adopting several innovative methods to boost their revenue," he said. "How they do it, is entirely left to them."
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