Indian aviation sector for domestic flights seems to have recovered from the sudden crash of Naresh Goyal-founded Jet Airways as the demand witnessed a single-digit upsurge in June 2019.
Indian aviation sector for domestic flights seems to have recovered from the sudden crash of Naresh Goyal-founded Jet Airways as the demand witnessed a single digit upsurge in June 2019. “India’s domestic market continues to recover from the demise of Jet Airways, with demand rising 7.9% in June compared to the year-ago period,” according to IATA’s global aviation results. India is a crucial market for Asia-Pacific region as 45% of domestic travel of the region comes from India, China and Japan. Also, Asia Pacific is the largest aviation market globally with over one-third passenger traffic emerging from this region.
The global aviation sector has also seen an uptick in passenger growth by 5%, but the same has borne the brunt of the ongoing trade war between the world’s two largest economies — the US and China — and is not at par with the previous growth. “Ongoing trade disputes are contributing to declining global trade and slowing traffic growth. These developments are not helpful to the global economic outlook,” Alexandre de Juniac, IATA’s Director General and CEO, said.
Meanwhile, Indian aviation has been in distress for some time now. Earlier in the year, entire Boeing 737 MAX fleet was grounded after the Ethiopian plane crash tragedy. This was followed by an abrupt suspension of Jet Airways’ operations after the airline struggled to clear off debts. While domestic carriers like SpiceJet, IndiGo and Vistara moved to fill the void created by Jet Airways, the domestic aviation sector faced a severe flight crunch for some months before abundant flights were introduced back.
Jet Airways was dragged to insolvency proceedings after the SBI-led consortium of lenders got impatient with sluggish resolution of the grounded airline. Jet Airways has thousands of crores worth debt that needs to be paid to lenders, employees, service providers and bank.
India’s largest carrier by passenger number, IndiGo, has also faced some turbulence in the past month with a public spat between its two founders Rakesh Gangwal and Rahul Bhatia. The former has accused Rahul Bhatia’s InterGlobe aviation of serious governance lapses and unusual control over the airline’s crucial matters. The capital market regulatory body SEBI is now overseeing the matter.