High costs and low yields. Implosion of the country’s second largest airline. Persistent technical issues plaguing two of the most popular passenger aircraft models flown by India’s airlines. Together, these factors have now plunged India’s aviation industry to its most precarious phase in the last five years or so.
Santosh Hiredesai of SBI Capital Markets summed up the situation in a recent note, characterising FY19 as a “year of sharp U-turns” for India’s aviation industry — from record profit in FY18 to mega losses, resulting in dire need of recapitalisation. The most visible event was the temporary suspension of operations by Jet AirwaysNSE -12.44 %, once India’s biggest airline by passengers and for many years the second largest.
