With multiple brands coming together under Air India, we should see more market concentration: Jagannarayan Padmanabhan of Crisil

Forum Gandhi Updated - December 23, 2022 at 06:45 PM.
Jagannarayan Padmanabhan, Director at Crisil Ltd

In an interview with businessline, Jagannarayan Padmanabhan, Director at Crisil, said that despite the challenges the aviation sector has been resilient

“By far, the last couple of years would have been the most challenging years for the aviation sector,” believes, Jagannarayan Padmanabhan, Director at Crisil Ltd. Speaking to businessline, he said that despite the challenges the sector has been resilient, fought back and learned lessons. According to him, that gives headway for the Indian aviation players in 2023.  Excerpts:

Q

What according to you are the challenges and milestones faced by the Indian aviation sector in 2022?

The overhang of the pandemic and uncertain geopolitical conditions leading to significant cost pressures were the challenges faced while in terms of milestones, the sector was resilient even with these challenges and witnessed the birth of a new airline in Akasa, opening up of new airports and terminals — Goa and Bengaluru — and the starting of construction of an airport at Jewar where some of the key milestones.

Q

What lessons in terms of consolidation, rise in air fares, pick up in passenger traffic, congestion at airports and new aircraft orders can the sector can learn from 2022?

By far the last couple of years would have been the most challenging years for the aviation sector. The key learning is that the Indian economy is significantly well-placed to absorb these shocks, translating into giving confidence to the stakeholders. The sector hasn’t had any major setback and has been fighting to overcome these challenging times and emerge stronger. Significant learning is to bet on the Indian economy.

Q

Will inflationary pressures and the looming shadow of global recession be a dampener for the Indian aviation sector?

Both these factors are well under control for India and traffic in many of the airports is inching towards pre-Covid levels. Expansion plans and on-streaming of capacity are underway and new greenfield airports are getting commissioned. Do not see much of an impact and we may experience a tailwind with the cooling of ATF cost in the months to come.  

Q

What is in store — in terms of opportunities and threats — for the aviation industry in 2023?

With the coming together of multiple brands under Air India we should see more market concentration and deeper penetration in both domestic and international market. Aviation sector and the economy of a country are intertwined. With a robust outlook for growth for India, we should see this translate in higher traffic in the coming years. Continued private sector capital deployment, impetus to regional connectivity and value for money pricing would be some of the important monitorables.

Published on December 23, 2022 10:47

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