India’s Airlines are Flying High Again, But Is it Too Soon to Celebrate?

Most airlines are in a post-pandemic revival mode. But how long will it last?

Suddenly, airlines are in the news with a positive spin and you need to only see a smattering of headline news to get the picture.

• Air India, now in private hands with ambitious new owners in the Tatas, is expected to buy as many as 300 narrow-body jets from Airbus or Boeing in one of history's largest aircraft deals.

• More than 900 or 55 % of IndiGo flights were reported to be delayed last Saturday as a “significant number” of cabin crew took sick leave – magnificently coinciding with a recruitment drive by born-again Air India.

• Billionaire investor Rakesh Jhunjhunwala celebrated his birthday week by unveiling the crew uniform of his soon-to-be-launched airline, Akasa Air

• Jet Airways is set to resume flights under new owners

• Flights in India have crossed the pre-COVID-19 levels, and this is reflected in the surge in airfares. Fares have surged by 30 to 50 per cent to their highest levels since the pandemic.

When the Going Is Good

In any business, who is happy depends on which way the wind blows – and that is particularly true of the aviation business. Right now, it seems, the winds are blowing in the way of airline staff as a war for talent hots up. But only a year ago, with Kingfisher Airlines grounded and Jet Airways bruised enough to have jets hanging out in their hangars, sob stories of airline staff were routine.

Things can be exhilarating when the going is good for airlines. I have personal memories of flying at dirt-cheap fares on Air Sahara and Kingfisher. The latter, particularly, was flattering on my first flight as it offered me business-class hospitality at a throwaway economy rate. Air Sahara even had in-flight auctions of fancy goods that offered real deals.

But, as it happened later, ailing Air Sahara got acquired by Jet Airways, which, in turn, faced all sorts of troubles. As it takes off again, it will be the same only in name and there is a lot of hard work ahead.

Air Deccan, which ushered in the idea of low-cost flying, was forced into the lap of Kingfisher, whose debt-ridden founder Vijay Mallya's evasion of Indian law enforcers from London is now part of everyday folklore. Air Deccan founder, Captain GR Gopinath, got busy writing newspaper columns after IndiGo stole the low-cost dream he was trying to build. Air Sahara’s founder, Subrata Roy, embroiled in all sorts of cases, has been out on parole from jail since 2016.

Managing an Airline Is a Constant Balancing Act

This is the time to recall two famous quotes. One, by billionaire investor Warren Buffett, goes: “Be fearful when others are greedy and greedy when others are fearful.” However, that might apply more to stock markets than investments in the aviation industry, for which a quote from Virgin Atlantic Airways founder, Richard Branson, is more appropriate: “If you want to be a millionaire, start with a billion dollars and launch a new airline.”

I am sure Rakesh Jhunjhunwala has heard the quote, but buying an airline is often like mountaineering. The challenge is inviting. The prestige is alluring. For wannabe airline barons, it is not about the money, honey. It is the business of what in India we call ‘chaska’, ie, the high of owning an airline as a matter of upward social mobility and visibility.

Sadly, the price of such highs is often paid by employees, customers and bankers. More often than not, jets associated with high-profile barons run on “other people’s money” that comes from shareholders, banks and sometimes as sweetened deals from aircraft-makers in a cut-throat industry. For customers, airfare honeymoons can be short-lived. For crew members, a strange mix of service stress and ambitions can resemble drunken night revelry: the hangover can hurt. Let us not even talk of perpetual anxiety over passenger safety.

IndiGo managed to steer through turbulence as its co-founders Rahul Bhatia and Rakesh Gangwal did well to keep the airline emotionally and financially grounded.

But the staff restlessness this week and the founders’ own feud that resulted in Gangwal’s exit from the airline’s board this year show that troubles can come in any form in the competitive industry, in which there is a constant balancing act to be performed between passengers, regulators, service crew, bankers and shareholders.

Enjoy the View, But Fasten Your Seatbelts

Running an airline is a veritable trapeze act as high costs, passenger sensitivity and sudden events can throw things out of gear. In 2020, within months of the COVID-19 pandemic, the combined market value of 10 listed airlines linked to aviation barons fell by about $14 billion. Jet fuel prices went up sharply this year in the wake of the Ukraine war, which was as unexpected as the pandemic. Price bands set by regulators in India are sometimes cited as a reason why Indian airlines cannot make use of good times to stay afloat in bad times.

While India's airlines are looking ahead to a bounceback year in a strong economy, European airlines have been hit this month by staff shortages and strikes over working conditions that have caused chaos in varying degrees across the continent. There have been 1,000 delays and 200 flight cancellations, according to trade union statements.

If you read all that well, you know that uncertainty is a near certainty in the airline industry.

For airline owners, a big fleet, a reputation for service and a solid brand offer social prestige, but there are hidden costs that they often do not notice or choose to ignore. When they do face these costs, everybody seems to pay the price directly or indirectly.

This is a sobering thought as airlines take off in a somewhat smug, post-pandemic revival mode. Enjoy the view from your window seat but do fasten your seatbelts.

(The writer is a senior journalist and commentator who has worked for Reuters, Economic Times, Business Standard and Hindustan Times. He can be reached on Twitter @madversity. This is an opinion article and the views expressed are the author's own. The Quint neither endorses nor is responsible for them.)