Emergency landings, chronic delays and millions of dollars in losses - and that's just for the month of April.
The Indian airline industry has grown at breakneck speed, with a huge increase in passenger numbers, the formation of new airlines by entrepreneurs, ready financing from banks and aggressive sales campaigns by Boeing and Airbus.
Now, at a time when many Indian airlines had predicted that they would be profitable, the industry is still hemorrhaging money, and some operators are struggling to meet day-to-day expenses even as they order more planes.
Outdated airports are staggering under the crush of passengers and flights. The arrival Sunday in New Delhi of the first giant double-decker Airbus 380 on a three-day tour required the grass shoulder of the runway to be mowed and picked clean of rocks.
Kingfisher Airlines, the homegrown start-up that began operating two years ago, has ordered five of the planes and has options for five more, despite the fact that it has not yet made a profit.
Optimists in the industry, including many of the entrepreneurs who are backing the airlines, repeat a familiar mantra in India: growth will take care of the problems. India's economic expansion and its increasing links with international business mean there is plenty of room for a multitude of carriers as passenger traffic surges, they say.
India has the fastest-growing number of passengers in the world. The number taking domestic flights jumped nearly 50 percent last year, and that total is projected to increase more than fivefold by 2020, to 200 million a year.
"You have to look at the opportunity that is out there," said David Velupillai, an Airbus spokesman who arrived aboard the A380. "The thing that drives air travel is economic growth," he said, pointing to India and China as the fastest-growing economies in the world. "We've consistently underestimated what the total Indian market will be," he added.
Many airports are being upgraded. GMR, an infrastructure and power operator, is building a state-of-the-art airport near Hyderabad, the central city whose traditional pearl-trading roots are being supplanted by software parks. The airport expects to attract 40 million passengers a year and will be fully outfitted with hotels and shopping malls on the expectation of being a hub linking Europe and the rest of Asia.
Just three people per hundred travel by air annually in India, compared with about 10 per 100 in China, said T. Srinagesh, chief operating officer of the Hyderabad airport project. Given the size of India, lifting that low figure to just six would mean "plenty of traffic for us," he said.
But considering the industry's current state, fulfilling those rosy predictions could take some work.
Competition is so cutthroat that carriers lose $10 to $15 a passenger per flight, according to the Center for Asia Pacific Aviation. Maintenance crews and airports are stretched to their limits as new passengers take advantage of supercheap flights. The industry is losing half a billion dollars a year.
So far, emergencies have been minor, like a collapsed wheel on an Air India plane that left it tipped on a runway in April, and no one is suggesting that Indian airlines are unsafe to fly. But the industry is unsustainable as it is, its critics say.
"The entire industry is operating with fares below their costs," said Kapil Kaul, who heads the Center for Asia Pacific Aviation. "Mergers, acquisitions and liquidations are necessary."
A shakeout in the Indian airline industry may already be under way, but it is not happening fast. After months of negotiations, Air Sahara agreed to a takeover by Jet Airways in April. The two government airlines, Air India and Indian Air, are expected to finally sign a long-awaited merger this year, although completing the deal is expected to take two years.
Air Deccan, the first low-cost start-up, has been searching for an investor that might include a partnership with Kingfisher, bankers and analysts say, though Air Deccan denies that there are any plans to link up.
Part of the problem is personality. Most of the executives at India's new airlines are entrepreneurs with deep pockets and, like most entrepreneurs, healthy opinions of their own business acumen. Most contend that they are going to come out on top.
Kingfisher, owned by Vijay Mallya, the magnate who produces beer under the same name, is not going to run out of money any time soon. But Air Deccan's future is in doubt. The company said this week that it had a loss of 2 billion rupees, or $49 million, in the first quarter of 2007, even though the managing director, G.R. Gopinath, had promised that it would become profitable by December.
source: International Herald Tribune
Planned induction of cabin crew to match operational requirements. 