Why private carriers should reduce flights to high-tax states
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Imagine a business where neither roughly 60 per cent of your costs are in your control nor is pricing! What's worse, your product has no shelf life and you cannot hold it for better times! And to compound all these issues, your industry has over capacity! You are right. The only industry I can think of which satisfies these fairly nightmarish facts is the Indian civil aviation industry. Aviation Turbine Fuel or ATF, thanks to recent coverage in all papers, is suddenly a term understood by even lay people. And this is the bane of the industry. Most airlines that fly in India today were planned and launched prior to the oil price spike that hit the world in the last two years. When the price surged beyond US$80 a barrel, and consequently the base price of the ATF skyrocketed, the airlines started bleeding. The situation got....
Why the FM must allow foreign airlines to invest upto 24 per cent
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There are two quotes that I always remember about the aviation business. Freddy Laker once said, "I'm flying high and couldn't be more confident about the future". Unfortunately this was followed shortly by his airline going bankrupt! And an apocryphal quote attributed to Richard Branson, "The fastest way to go from a billionaire to a millionaire is to open an airline". The Indian aviation industry is at the crossroads today. With losses expected (as per IATA) to cross US$ 2 billion this year, the survival of many players itself is at stake. What has caused this crisis? The financial dire straits of the industry are firmly linked to both internal and environmental issues: - Prohibitive ATF prices - Increase in development charges, landing fees, MRO costs - Unconstrained airline density growth over the past 4-5 years leading to humongous over capacity - All....
More about Raj Halve
Raj Halve is a business expert in the field of PE investment, mobile gaming, tele-shopping, IT, liquor, e- commerce and hospitality industry. An MBA from Jamanalal Bajaj Institute, Halve, was the Head of Marketing, Sales & Business Development for Reliance Telecom – Webworld. During his stint as the Marketing Head of Shaw Wallace, Halve spearheaded the launch of White Mischief vodka with ‘I’m in the mood of mischief’ positioning.Recent Posts
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