Aviation

COVID-19 impact: Will the Indian aviation sector be reduced to 2-3 players?

The aviation sector is flying through turbulence that seems to find no landing any time soon. In a report by CAPA, the industry expert says Indian aviation will shrink to 2-3 players without funding. This, they believe, will result in a sustained damage to connectivity in India. Highlighting the financial strain Indian carriers are facing, sources tell ET NOW that SpiceJet will now have to pay around Rs 60 Lakh every day to the Airport Authority of India to be able to operate their flights. The airline also needs to submit AAI a payment plan to clear their past dues.

In a discussion with Tamanna Inamdar on India Development Debate, Ajay Awtaney, Founder, LiveFromALounge.com says he expects only IndiGo, Vistara and Air India will be able to survive this storm. “IndiGo is cash-rich. They are doing the right thing by raising liquidity and have also taken cost-cutting measures. Vistara too is in a good position right now. They are bleeding financially but have the support of two strong backers. Air India, on the other hand, has the backing of the government”, explains Awtaney.

Jitendra Bhargava, Former ED of Air India points out the sector will not be seeing any M&A action now as all airlines are in a very sad state with surplus capacity and employees, shrunk net worth and fewer passengers

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