Low-cost airlines plan fleet expansion, step up hiring
Saurabh Sinha | TNN
New Delhi: Thanks to the economic revival, the Indian aviation industry has taken off again, overcoming fears of being grounded for long by the threat posed by last year’s slowdown. The massive growth in past two months, led by December’s record figure of 33% and January’s 23%, has led to airlines again looking at expanding their fleet and stepping up on the hiring front.
The decline in passenger numbers started reversing from last July. With the turnaround in mid-2009, the last six months of the year saw a huge jump in the number of domestic fliers, finally boosting the tally to 445 lakh, 8% higher than 2008. More importantly, it reversed the 5% negative growth in 2008.
This change in fortunes has led aviation minister Praful Patel to say that the worst for the aviation sector is over. “We are cautiously optimistic. If this trend continues, most airlines can expect to come out of red and ensure that India has good connectivity,” he said recently. The ‘cautiousness’ stems from the poor financial health of big airlines like the Air India-Indian Airlines combine and Kingfisher.
The hope obviously comes from the LCC model that has emerged as the way India will fly in future. Budget carriers are very upbeat. The biggest Indian LCC, IndiGo, is looking at hiring 1,000 people — 100 pilots, 400 cabin crew and rest passenger service staff — this year. “Our current fleet size is 24 and this number will go up to 34 by year-end. IndiGo has 2,500 employees and the ongoing recruitment process will aim at hiring about 50-70% fresh inexperienced cabin crew and airport staff who got trained but did not get a job during the slowdown,” Indi-Go president Aditya Ghosh said.
SpiceJet is also on a hiring spree as its fleet size will rise from 19 to 25 by year-end. The airline will also qualify for flying abroad this summer. It is now in the process of raising money to fund the expansion plan. Kingfisher chief Vijay Mallya has also said the airline may add planes to its fleet while announcing his new international flights recently.
Taking Off
IndiGo is looking at hiring 100 pilots, 400 cabin crew and 500 passenger service staff. It will also increase its fleet size to 34 from 24 by this year-end SpiceJet is also on a hiring spree as its fleet size will rise from 19 to 25 by year-end Revival brings cheers to airport operators
New Delhi: The revival is good news for airport operators, both private and state-run Airports Authority of India (AAI), which are implementing modernisation projects worth thousands of crores. The slowdown had led to such a situation that private developers said they would not be able to continue work in places like Delhi and Mumbai and a fee was levied on outbound passengers. As a result, for the first time, the government had to allow passenger fees on old airports in these two places to fund construction of new facilities.
AAI chairman V P Agrawal said: "We are developing airports at huge costs on the basis
of certain traffic growth projections. The slowdown in travel over the past two years was threatening to make those projections look unrealistic. Now that domestic travel is on the upsurge, air travellers will find newer and better airports ready across the country. Our revenue flow from both aeronautical stream and city side development is looking up and will help funding of the projects and their timely completion."
Centre for Asia Pacific Aviation (India) head Kapil Kaul predicts that airlines are now entering a long-term high growth phase which should see many of them going profitable next fiscal. "No one could have predicted the kind of sudden revival of traffic we are witnessing now. Everyone, including airlines, has been taken by surprise," Kaul said.
The Airport Economic Regulatory Authority (AERA) is trying to ascertain a fairly scientific model of traffic growth projection that would help in 'fair' determination of airport charges for airlines and user fee for passengers. "Airport developers are getting good amounts for their city side or non-aero projects. We will be reviewing the user fee at airports on the basis of their actual costs and new revenue projections," said a senior AERA official.
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