Crisis in the Indian aviation sector: Challenges and the future roadmap

Abstract

Aviation sector in India has undergone a lot of transformation from being over regulated to a liberalized and investment friendly sector. Entry of private players, Low cost carriers, increased FDI allowed by the government, Growing passenger and cargo traffic, Strong economic growth , Higher Income have become the major drivers which are fuelling the growth trajectory of the Indian Aviation sector. Even the forecasts show a growth rate upwards 15 percent for both domestic and international aviation sector. Liberal policies have ensured competition in the market. Government is trying to meet the infrastructural needs arising out of the expansion of the industry be developing Greenfield airports and modernization of the existing ones. The government has also announced new ground handling policy and is taking adequate steps to ensure the quality of services provided by the airports. The demand has steadily risen in both passenger and cargo segment and significant attention has also been paid to Maintenance, Repairing and Overhauls facility which is growing at 15 percent. While there looks to be plenty available for the airlines in this growing industry, there are many constraints and challenges associated with which needs to be tackled to ensure a steady growth. Some of the issues include dwindling profitability, congestion, technological issues and manpower shortage amongst others. The need of the hour is to make optimum utilization of the resources and at the same time go on a planned expansion. The intent of this study was to study the growth history of the aviation sector and to bring out the challenges which are stifling the growth potential of the industry. The issues have been identified with a few of them dealt in detail with what exactly their causes are. Also, the scope was to study a few carriers encompassing all segments and study the various strategies adopted by them thus doing a comparative study. In addition to the secondary research, A primary research was also done with interaction from the officials in paramount Airways to understand their business model and prospective future strategies. After analyzing the various carriers and the industry, the findings showed the main challenges and what is being done better by other players. Based on the analysis, a set of recommendations have been drawn for both the government and airlines perspective. All in all, this industry needs a collaborative effort from all the stakeholders to follow the growth curve. The airlines need to prioritize the issues and take adequate steps to ensure a focused approach towards unearthing the reasons and addressing the same.