MAJOR MANEUVERS IN INDIA

March 05, 2023

Which fly stung the Indians? Certainly, all observers have noted the phenomenal growth of the economy as well as the improvement in per capita income of nearly 14% in 2022. According to the most serious forecasters, the population will soon become the world's leader, ahead of China. And moreover, a good part of the world's research takes place in this country/continent. In short, India, led for a seven-year term by Narendra Modi, has the wind in its sails. And that translates into air travel, of course.

It must be said that a revolution in this field was much needed. The flag bearer carrier, Air India, is in very bad shape with all the defects of a nationalized company. It has lost its place in the absence of the necessary modernisation. The revival is happening with the merger announced for 2024 with Vistara the international carrier that rises with capital held by the private group Tata Sons and Singapore Airlines. Parenthetically, Air India was established by the Tata Group in 1932 before being nationalized in 1948.

Let us also recall the resounding bankruptcy of two challengers. Jet Airways, led by Naresh Goyal, closed in 2019 following major management mistakes for not having listened to his advisor Pierre Jeanniot the former Director General of IATA who advocated caution. The company, which still had 100 aircraft, had chosen to open trans-Pacific routes while its natural development would have been rather towards Europe and the transatlantic, markets much cheaper to operate. Kingfisher Airlines also died for wanting to go too fast in its development. Its owner Dr Vijay Mallya had made his fortune in the eponymous beer and he probably thought it was no more difficult to operate planes than to dispense a popular drink. Only the airline has an incomparable status compared to other sectors of activity and the surprise order that Vijay Mallya placed at the Paris Air Show in 2005, the year of the beginning of its operation: 5 A380s, 5 A350s and 5 A330-200s was simply unreasonable. But overnight, the head of a company that had just been born became a global star. And it went to his head. In 2012, bankruptcy had to be declared with 2 billion euros in debt and Vijay Mallya fled his country before his arrest for NSF checks.

In short, air transport, which had little support, it must be said, by the governments of the time, which were constantly taxing it, had great difficulty in finding the necessary stability. If there is one country where this mode of transport is useful, it is India. Ground infrastructure is poorly developed and in any case insufficient for the needs of a population whose middle class alone is more than 100 million people. The modernization of airports is underway and that of Delhi could be widely taken as an example by many European hubs.

Domestic transport is now handled by very large operators. Indigo operates 262 aircraft mainly Airbus320 series plus some ATRs, its competitor SpiceJet puts online 117 Boeing737 and Go First 26 Airbus. And the results are there. Certainly, the disastrous period of Covid 19 has momentarily broken the beautiful mechanics, Indigo posted a result of 1.6 billion in 2019 but a loss of 700 million in 2022. Only the borders opened completely on February 13, 2023, including for passengers from China and optimism is required.

And aircraft orders are raining down. Air India associated with Vistara, has placed an order for 252 aircraft to Airbus and 221 to Boeing, an order never seen because it is a mix of long-haul aircraft: 34 A350 and 30 Boeing777 and 787. Indigo is not lagging behind with 534 aircraft on order mainly Airbus 320 series, as for SpiceJet, it has ordered 249 B737 new generation from Boeing.  The total fleets of India's major carriers: Air India, Vistara, Indigo, SpiceJet, and Go First, currently in operation are 658 aircraft. Well, the 1,940 orders represent 3 times the total current fleet. This shows, to say the least, strong ambitions.

If all goes well, India can become a major air transport operator in the next 10 years. European countries pale in the face of this development, it must be said that air transport is rather criticized these days.