How Air India and Kingfisher can keep them afloat

Air India, being a public carrier enjoys many benefits from the Government like bail out plan and slots preference. However, Air India needs to address its internal issues like inefficient route network, commercial ineffectiveness, poor staff morale and improper management; to maintain a healthy position in the market.

Kingfisher airline, on the other hand, do not face problems related to workforce and aircraft operations. Its only trouble is its huge debts. The airline needs to generate funds urgently to avoid issues pertaining to declining market share, capacity reduction on profitable routes, losing slots and passenger loyalty.

Challenges needs to be addressed

The biggest challenge that may hinder the growth of Indian aviation industry in 2012-2013 is the infrastructure constraints. The Government has allowed import of jet fuel directly that requires huge storage and logistics infrastructure. However, Indian airspace infrastructure will not be sufficient to cater the increasing passenger requirements. Further, a lot more investment needs to be done to encourage regional connectivity in far flung areas that lacks infrastructure.  A major policy initiative is also required to monitor predatory pricing and stabilize the airport charges.

Increase in fuel prices can make the situation worse

Jet fuel in India accounts for almost 50 percent of the total operating cost of the airline making Indian carriers cash strapped. Its further increase will ruin the financial health of the Indian carriers. However, the Government nod to allow import of jet fuel directly may help these carriers save cost on fuel.