It has been almost an year since the 49 per cent FDI holding in Indian airlines was allowed. Not surprisingly, there have been announcements of some major foreign players venturing into the Indian airline industry either by way of substantial stakeholding in an existing airline or in form of new joint ventures.
Apart from equity infusion that may reduce debt levels, the entry of major global players is expected to bring in operational expertise. Indian Airlines, by virtue of the fact that it may be part of a larger alliance, may get a favourable treatment in various international commercial negotiations.
Customers may also hope for better service quality and better prices due to higher competitions. Other stakeholders in the aviation sector such as airports, ancillary service providers, booking agents and the like may sense higher revenue opportunity.
However, the additional capacity expansion will put a lot of pressure on the Indian airline industry, which is already struggling with profitability on a sustained basis. Like its counterparts in many other countries, the Indian airline industry is prone to bouts of heightened price wars. A majority of the expenses for airlines are fixed in nature and not dependent on the number of passengers being carried.
Read News in full 20/12/13 Ashoo Mishra/mydigitalfc.com
No comments:
Post a Comment