-The CNN Asia Business Forum 2017, offered an insightful leeway into the challenges faced by Indian Aviation sector, despite India making huge leaps towards becoming an aviation super-power.
The Taj West End, zestfully presented the annual Asia Business Forum for the second time, with CNN playing the host. The event was a gathering of the movers and shakers of aviation, investors, entrepreneurs who struck the right chords of wit and wisdom. The discourse about the burgeoning Aviation industry, found itself the most prominent spot amidst the discussion.
While in an exclusive conversation with Richard Quest, the Civil Aviation's Union Minister, Pusapati Ashok Gajapathi Raju, established that though the aviation industry is in hot water with all the heavy taxation problems and high operational costs, it still has a large impact on India’s trade and commerce. He said their main focus now is to improve regional connectivity, because that can open the door for a host of economic opportunities. Mr Gajapathi Raju with reference to the business model proposed by the Government affirmed that the correct blend of private and state partnership will help the aviation industry to conquer greater heights. When asked to comment on the privatization of the Government owned Air India, the Union Minister answered, “If it is left the way it is, it is bound to die. We want Air India to survive; it doesn’t matter where it is as long as it serves the Indian people and our Indian skies.” He added that the airline had not suffered from additional losses in the preceding 2 years, and also said how he categorically wished to see Air India thrive.
The interview was followed by a panel discussion on aviation, hosted by Richard Quest. The panel members consisted of the Chairman and Managing Director of SpiceJet, Ajay Singh; the CEO of Vistara Airlines, Phee Teik Yeoh; and the CEO of JetSetGo, Kanika Tekriwal.
A product of Tata Group and Singapore Airlines' collaboration, Vistara's CEO, Phee said, a lot of external factors can undermine an airline's growth opportunities. As an example, he talked of the soaring airline fuel prices in India, and mentioned how the cost has increased by above 50% in this year itself which eats into profits, and diminishes thin margins. Phee admitted that the luxurious business travel market in India is not as high as they had anticipated despite the fact that the market for civil aviation in India had grown in excess of 20% in the last 25 months. Ajay Singh said SpiceJet was a great example of success. Singh, stated that SpiceJet would spend on planes only in cases where they could earn a proper return on investment. Singh is positive that there is a high degree of growth potential in long-haul, lesser cost flights in India in the future. He also said in comparison with other parts of the world, airline industry in India faces huge competition because of high airport costs, low airfares, and towering costs of Aviation Turbine Fuel. Kanika Tekriwal stated that "despite being a cut-throat industry, there was no better time to be in the aviation business". She operates an immensely successful business where she leases private airlines, and has an own set of pilots, mechanics and crew members who look after the planes.