Ajay Singh, Former Director, SpiceJet says getting the right business model for an airline is of utmost importance now as it is getting difficult to run an airline successfully.
India will have six new airlines before the financial year ends apart from the existing airlines that continue to report losses every consecutive quarter. However, any bloodbath in this space is still some time away believes Ajay Singh, Former Director, SpiceJet .
Kapil Kaul, chief executive officer- India Subcontinent, Centre for Asia-Pacific Aviation, who believes otherwise, says the full impact of the latest entrant- Vistara will be felt in FY16. "The market continues to be very challenging for the industry. While there are some early signs of easing like the possibility of lower ATF prices and the rupee stability, these are only temporary," adds Kaul.
Where are carriers going wrong
Singh says getting the right business model for an airline is of utmost importance now as it is getting difficult to run an airline successfully.
"Fly fewer destinations but fly with full capacity and fly on time. Airlines need to learn how to attach costs," he adds.
Singh, however, also has a suggestion for the government- treat aviation as more than mere luxury and take a holistic approach towards the industry.
"AirIndia is the market spoiler in the sector. It can make whatever losses, and it will be funded. With AirIndia its fares don't need to be rationalized, so we can hardly have a level playing field," he further adds.
Transcript to follow soon
SpiceJet stock price
On August 11, 2014, SpiceJet closed at Rs 13.14, down Rs 0.18, or 1.35 percent. The 52-week high of the share was Rs 26.65 and the 52-week low was Rs 12.50.
The latest book value of the company is Rs -22.24 per share. At current value, the price-to-book value of the company was -0.59.
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