Nine things to look for in Indian aviation in the New Year

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India’s airline industry, which has lived with turbulence for years together, has coped with the COVID-19 pandemic for 21 months as it heads into 2022. The only silver lining is that no airline has gone under and hope remains the industry as a whole will emerge stronger than it ever was.

The New Year seems to be a very promising one for Indian aviation, with the hype already built up. Here is a look at what to expect next year.

Air India’s integration with Tata airlines

For Tata group, the battle may have been won with its successful bid for the national carrier, but the war begins now! The complex process of integration of its four airlines – Air India, Air India Express, and Vistara and Air Asia in which it holds stakes -- will start now. While the group will look at plugging losses, the massive integration effort will have to look at aspects like staff pay, information technology systems, operational efficiencies, routes and spending money on improving the hardware of Air India aircraft.

Akasa

The most talked about airline entry is due in 2022. Akasa, led by former Jet Airways CEO Vinay Dube and a team of former executives from the airline and backed by ace investor Rakesh Jhunjhunwala, is expected to obtain its Air Operating Permit (AOP) and start operations by April. The airline placed an order for 72 B737 MAX aircraft at the Dubai air show. The going won’t be easy for the airline as it battles for slots and night parking at major airports.

The new airline’s imminent entry has already led to a battle for talent in the industry, which has been reeling under job losses and salary cuts.

Jet Airways

As many former Jet Airways executives invest time in setting up Akasa, Jet Airways 2.0 has its own ambition to make a comeback as a full-service carrier. The airline’s new ownership team neither has the aircraft tied up nor has it got the airport slots which it wanted back. With so many headwinds, will the airline be able to stage a comeback and defy history? The answer was a stern no in 2021, but 2022 could well be different!

Airport privatisation

The next round of privatisation of airports is due to come up soon. With the Adani group in charge of six airports in the country in the public-private partnership mode and GMR group expected to operationalise the Mopa international airport in Goa next year, competition in the sector will intensify. The battle for control of airports could see new players join the race or existing ones grab a few more and dominate the market.

Fleet renewal

IndiGo has relentlessly worked towards retiring its A320ceo aircraft and replacing them with the A320neo and A321neo planes. While IndiGo will still have a few A320ceos when 2022 ends, Go First may have gotten rid of all its older generation aircraft. With SpiceJet having started flying the B737 MAX again and more deliveries due to start soon, the year could see maximum next generation aircraft being inducted by airlines in the country.

Return of air traffic

Airlines in India have adjusted to the new reality. The erstwhile good and bad quarters for air traffic have been phased out, with passenger numbers hinging on COVID-19 cases and pandemic waves. The best of quarters have seen airlines being nearly grounded while the traditionally weak quarters recorded new highs. As the country went ahead with an aggressive vaccination drive and kept cases in control, passenger numbers in the domestic segment reached within 10% of pre-COVID levels in November. Traffic has been holding on since then but hasn’t crossed the pre-COVID levels just yet.

International flights

After months of remaining closed for international operations, India was to open scheduled commercial flights starting in mid-December. The scare from a new COVID variant, named Omicron, led to pushing the date back. As it stands today, scheduled international services remain suspended until the end of January except for flights operated under air bubble arrangements.

Regional carriers

Regional carriers haven’t had it easy. flyBig, which launched operations in early 2021, has been struggling. It hasn’t inducted any additional aircraft and moved its sole plane to Guwahati to operate on routes under the Udan regional connectivity scheme. Hyderabad-based TruJet has had its fair share of problems, along with failed investment plans. The two airlines will be under tremendous pressure to tide over another year and without investments, the going could get tougher. India has been a graveyard for regional carriers; TruJet has survived the longest thus far, but to get ahead from here, it needs a lot more than capital infusion.

Possible aircraft orders

As the Tata group takes control of Air India and IndiGo goes ahead with expansion, the focus will be on future aircraft orders. The choice for replacement of the B777s of Air India and reinforcement of its fleet of B787s will be interesting to follow. With Vistara opting for the B789, Boeing has a headstart in the wide- body segment and Airbus remains the favourite in the narrow- body segment. Yet, there could be surprises!