Why is Indian aviation flying low?

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Why is Indian aviation flying low?

It was the hottest sector last year, but no more. The Indian Aviation industry has hit an air pocket even though the global aviation industry is flying high after 9/11. CNBC-TV18 finds the poor performance of Indian carriers has forced many new airlines to ground plans even before take off.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show » RELATED NEWS SpiceJet launches SpiceJet hotels Boeing,SpiceJet announce order for 10 next-generation 737s ALSO READ See latest News about SpiceJet See previous management interviews See what other Experts & Brokerages are saying about SpiceJet SpiceJet BSE | NSE 01/01/70 Are Mutual Funds betting on SpiceJet? Other Stocks in this news Jet Airways | Kingfisher Airlines |

It was the hottest sector last year, but no more. The Indian Aviation industry has hit an air pocket even though the global aviation industry is flying high after 9/11. CNBC-TV18 finds the poor performance of Indian carriers has forced many new airlines to ground plans even before take off.

From hot to not - in just one year the Indian aviation industry is crashing out of favour. Jet 's Rs 95 crore profit for the first quarter last year is down to a Rs 45 crore loss this year and Air Deccan lost a total Rs 35 crore in the 12 months up to March. Even SpiceJet lost close to Rs 41 crore.

All this while the global aviation industry is finally turning around after the 9/11 set back. Carriers like British Airways and Singapore Airlines have seen profit grow between 20-40% this year. So why is India flying low? 

Indian carriers blame rising fuel costs and high infrastructure charges for the turn in fortune. But global carriers have survived the same additional expenses.

Experts are saying India's key problem is one of plenty! 20% more passengers are flying every year, but it's still too small a market to fit eight carriers. The overcrowding has other negatives. Airlines lose about Rs 2500 for every extra minute of circling or waiting to take off.

The urgent need of the hour then is containing costs. From pilot salaries that have shot up due to short supply to full service airlines that need to get leaner to compete with discount carriers. Lower costs and a smaller workforce - that's what global airlines did after 9/11 is maybe what India should follow.