Sylvianism

Real Estate for US, Airlines for India?

// April 28th, 2009 // Economics, Featured

The whole current economic downturn and the consequences in US were triggered by the fall of Real Estate firms and the financial companies invested in those companies.

With the effect of the slow down slowly spreading to India and other Asian countries, the economic punters are concentrating on the real estate firms as they expect them to fall first. But in India, there is another industry which is heading to the biggest crisis in their history -The airlines industry

Why do I say this?

1. The huge operating costs incurred by the top 3 airlines of India and the subsequent losses. The total loss amounts to $2 Bn in the year 2008-09.

2. The heavy debts incurred by the airline companies – a total of 30,000 cr – Air India with 13,000 -15000 Cr followed by Jet Airways with 10,000 Cr and Kingfisher with 7800 -8000 Cr

3. The inability to reduce the operating costs by reducing man power . Jet Airways’ try becoming futile political row.

The companies are unable to assess the losses for the next year and it depends on the fluctuating oil prices. With the gulf countries too going in to recession, it seems a bleak near future for the airline companies.

The losses are fueled by the cost cutting measures of corporates and the lack of interest in the fully functional services on non-metro routes.

The increase in losses and operating costs may fuel the doom of these companies. The government may save Air India and the money power of Mallya can save Kingfisher but Jet Airways, the largest private airline of India will not be able to with stand. The current economic crisis seems to prove the fact that the fall is inevitable.

Will it be Airlines for India?

– Post From My iPhone

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