Mumbai: Indian aviation industry is now in a piquant situation due to falling revenue and high fuel costs. It will have to seriously deal with over-capacity on certain routes, former Air India Chairman and Managing Director, V Thulasidas said.
At the same time, their costs have gone up, mainly due to the unusually high fuel prices. The two together are pressing the airlines from both sides,“ Thulasidas told PTI.
“The ATF cost in India is much higher...therefore, the problem in India is much more serious than any where else in the world,” he said adding,” the domesting airlines will have to look at fleet rationalisation.“
The over-capacity in India was not only on domestic trunk routes but also on some nternational flights, he said, adding,” all the domestic air-carriers will have to look at innovative methods to ensure that their revenue is more than the cost.“
Cutting down capacity is nothing unusual, he said adding ” the excess capacity is a global problem and not just in India.“
Beacuse of the falling demand, several US carriers have grounded some of their aircraft. In India, the problem got magnified because this happened suddenly, Thulasidas said.
“Globally also, capacity rationalisation is something which the airlines are resorting to, besides adopting several innovative methods to boost their revenue,” he said.
“How they do it, is entirely left to them.”
Thulasidas, who retired as CMD of the state-run airline this March, said that Air India and Indian (erstwhile Indian Airlines) were in a slightly difficult situation as both had extreme capacity constraints and that the on-going aircraft acqusition was mainly for the replacement of the fleet.
“The fleet acquisition is more to phase out the older aircraft than for the growth. Only 40% of the acquisition is for the growth purpose,” he said.
On the recent delay of the Dreamliners delivery by the Boeing Company, Thulsidas said,“ the delivery would have compounded the problem. So, in this kind of situation, the delay is a boon, to that extent, Air India has gained in a sense,” he said.