An airline going down, well almost, promoter fights and an ambitious disinvestment that refuses to take off - 2019 was hardly a smooth ride for India's aviation industry. And, it probably could be a sign of things to come in 2020.
Jet Airways survival woes
Even till April 16, the buzz - or hope - in the corridors of Jet Airways was that its founder Naresh Goyal will somehow manage to keep the airline and himself afloat. But, it turned out to be that kind of a turbulence that even the ace networker could not maneuvre. Late on April 17, Jet Airways announced that its coffers had gone empty and it did not have any cash left to run its operations. It has been eight months since then, and lenders - who are hoping to get back Rs 8,500 crore in dues - are still struggling to get a buyer for the airline. The only bidder - South America's Synergy Group - looks like a reluctant bidder at best. It has asked for one extension after the other to submit a bid. Is liquidation on the cards? It could be as soon as the 270-day window - as specified by the IBC for an insolvency process - gets over in March 2020.
IndiGo promoters' public spat
The two had one of the best business partnerships that India Inc had ever seen. Rahul Bhatia and Rakesh Gangwal, friends-turned-business partners, grew IndiGo into India's largest airline with a now uncontested market share. When did the friendship turn sore? No one knows. Moneycontrol got the first whiff of a spat in December 2018. The rift came out in the opening a few months later when Gangwal wrote to SEBI, listing serious corporate governance issues in IndiGo. Despite amendments to the company's policies and Articles of Association, the feud is still not done. Bhatia has taken his partner to the London court of arbitration. Will 2020 see the two become friends again? Unlikely. But, will they bury the differences and go their separate ways? Likely.
Aircraft trouble
One's pain, another's gain? That is usually the case in corporate rivalries. But, when it came to the world's two largest aircraft manufacturers - Airbus and Boeing, it is difficult to say who ends the year with a bigger smile. Or, should we say, with lesser pain?
Boeing was forced to ground its Max 737 planes after twin tragedies involving the aircraft left more than 300 fliers dead. Investigations later found out lapses in the company's process, and a possible revival may come only in 2020. But, will that be too late? The 737 was expected to push the company's sales in the narrow-body segment (India's SpiceJet is a big customer), but has Boeing already ceded the market share?
Not that rival Airbus is getting the best of news. Its A320 Neo is facing serious engine issues. To be fair, much of the blame could be on Pratt & Whitney, which supplies the engine. In India, market leader IndiGo is facing music from regulators and has been asked to replace the engines by the end of January 2020. The problems have had a major impact on its capacity expansion plans.
Air India disinvestment, or the lack of it
The Maharaja has managed to survive another year. But, by the rate it is burning cash while having debts of about Rs 60,000 crore, it is hoping for another government largesse to continue operating. Air India will be pushing its luck if it does not get a new owner in 2020. It is not that the government has not tried, especially after the disaster of 2018 when its disinvestment proposal got zero interest. The administration is now working overtime to make a success of it in 2020. A lot will depend on how it makes the debt mountain an easier climb for prospective investors.
The growth blues
In 2018, India was the fastest-growing aviation market in the world, expanding by 18 percent. China was a distant second at 11 percent. The tide has turned in 2019, with growth trailing year before rates for most of the months. It was only in November that the domestic aviation saw growth crossing the 10 percent mark and was mostly stuck at sub-5 percent levels, and even de-grew in April.
Will 2020 come with higher growth? It looks unlikely, given the poor economic condition and some of the bigger airlines struggling to add capacity.
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