At the same time last year, the Indian aviation sector tiptoed into 2022—amid a drop in Covid-19 cases, depreciation of the rupee, an international travel ban and airfare caps—with a “cautiously optimistic” approach and high hopes that a new Covid-19 variant wouldn’t dampen the high hopes of the sector. 

‘Maharajah’ returns

During the bumpy ride of 2022, the Indian aviation players continuously witnessed somethings old and some new. There was the homecoming of the ‘maharajah’ to the Tata Group after a long wait of 69 years. The Tata Group hasn’t spent a single day without dealing with a host of legacy issues since nursing the airline back to its old glory . But global aviation experts have unanimously agreed that if there was ever a turnaround for Air India, it was only possible in the hands of the Tata Group. 

The Group has since acquired a 100 per cent stake in Air Asia India, decided to merge Vistara with Air India and placed a sizable aircraft order. With Campbell Wilson in the pilot seat as Air India’s CEO, in 2023, Indian aviation geeks are waiting with starry eyes to witness Air India’s new and refurbished avatar. 

Another full-service carrier with a legacy, despite being grounded, that made it to the news was Jet Airways. The winning bidders, Jalan Kalrock Consortium (JKC) appointed industry veteran, Sanjiv Kapoor, to steer the wheel of Jet 2.0. The airline soon managed to receive its Air Operating Certificate. 

It was the first time in the history of the Indian insolvency cases and aviation sector, that a defunct airline, inches away from liquidation had managed to receive an AOC. The euphoria was short-lived after the company’s vision to restart operations came crashing on multiple occasions. It was only then that its issues with the lenders came to the surface with both parties finding themselves standing in front of a judge in the NCLT again seeking directions.

While the company still seems to have kept its hopes alive, the erstwhile Jet Airways CEO Vinay Dube has already touched the Akasa (skies) with his new-founded airline. 

Soon after its launch, its promoter Rakesh Jhunjhunwala’s untimely death, did send some shockwaves and cast a shadow over the future of the airline. However, Dube then said that the airline was well capitalised for the next five years. “Akasa Air’s fleet size will be 18 aircraft by the end of March 2023 and over the next four years, we will add another 54 aircraft, taking our total fleet size to 72 aircraft,” he added. 

Indigo

Another no-frills carrier that has made some interesting moves is IndiGo. Despite the pandemic, it was the only airline to generate profits as well as a positive cash balance. During the year, it also launched operations to seven domestic and international destinations. The airline also launched its freighter operations. 

“Indian carriers that are well capitalised, and the promoters are committed to airlines. The Tata Group airlines, IndiGo and one would even go far enough to say Akasa is entering 2023 on a positive note,” Vinamra Longani — Head Of Operations — Sarin & Co said.

Poor performers

On the other hand, two airlines that continued to face issues were SpiceJet and GoFirst. While the former’s plans to hive off its cargo operations are yet to see light, the latter’s IPO plans have been stalled. Both these events will be worth a watch in 2023, said experts.

On the capital front, private capital continued to flow in the airports and the MRO segment within the industry too. The Adani Group has changed gears with its eight airports, the Tata Group winning the bid for Jewar airport and Bangalore airport launching its new terminal and the launch of Mopa airport in Goa. Besides this, Adani too acquired Air Works, giving a boost to the MRO segment.

From a long-term projection perspective, Jyotiraditya Scindia, Civil Aviation Minister, said that India is projected to have 40 crore air travellers on domestic and international routes by 2027 and will breach the 50-crore mark by 2030.  The government has also introduced the National Drone Policy, has also included aerodromes under the UDAN scheme and enhanced focus on heliports.

However, the biggest pain point for Indian aviation continues to be taxes on the ATF. While Scindia’s efforts have managed to get VAT on ATF from multiple States to a minimal amount, it continues to be a pain point for Indian airlines. Industry experts are hopeful that the government will get them to reduce the taxes on this front. 

Despite all this, according to Ameya Joshi, founder of Network Thoughts, said that in 2023, there are umpteen opportunities for people to join the industry as the major airlines expand rapidly. The threat remains from sliding rupee, rising interest rates and fluctuating oil prices. Addition of fleet is good for pilots, airports, staff, cabin crew and just about the entire eco system but will it make money? It is a question that can be answered only in 2023.

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