The lifeline for Indian airlines is on its way

A lot of ink has been spent worrying about Indian airline companies in the past few months, with all the $ costs of their plane leases, jet fuel and other expenses going up 20% on one side for no fault of theirs, and they being forced to sell tickets on a low cost to compete with the government-owned underdog. All these blokes who fly planes in India do not have a government lifeline from my tax money as Air India does, and evidently, have been priming for a shutdown (at least speculation is such!)

Everybody out there believes there is a huge market in India for aviation. If only 5.5 million passengers out of a billion+ population flew inside India in 20122,  and there are only a few hundred planes for the whole of the Indian aviation industry, it is an opportunity for a lot many to get on their first flights! And knowing this fully well, a lot many airline operators have been wanting to take a stake in the Indian market for the longest time. Only, they were not allowed to because the Indian Government prohibited foreign airlines to invest in Indian airlines.

After all the troubles with Air India and Kingfisher Airlines, however, that looks to be changing the thinking of the Government. They are now moving to allow up to 49% in Indian airlines by foreign aviation companies. This is just the beginning of the process and it could be derailed easily at any step, but if it goes forward, there are already some airlines waiting.

IAG, while you prepare to buy over BMI in UK, have you kept that little kitty aside for dear friend Kingfisher Airlines in India? I sure hope so!

 

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About Ajay Awtaney

Ajay is a financial services pro, working to bring order to the chaos of the financial industry on an everyday basis! Beyond that, he dons the hat of India's favourite frequent traveller, trying to help people elevate their travel experience via tips and tricks they never knew before, or introduce them to the world of miles and points. Armed with an MBA from MDI Gurgaon and graduate degree in computer science from the University of Delhi, Ajay brings a systematic and objective approach on the table for his audience in dissecting travel and loyalty programs in India and around the world, and how to benefit from them. Ajay has been quoted in various reputed traditional and online media including The Hindustan Times, Inside Flyer, Bloomberg, DNA India, Conde Nast Traveller, The Telegraph, Mumbai Mirror, Mint, MoneyLife and The USA Today.

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