From flight delays to engine failures: What is ailing India’s aviation sector?

India's aviation sector has witnessed remarkable growth in recent years, making air travel accessible to most people and leading to a broader inter-city network, thereby fueling economic growth. The domestic air traffic has surged in the country over the years. In the first six months of this year, 79.35 million passengers travelled by flight, which is a 4% increase from the corresponding period in 2023. It is also the highest-ever domestic passenger traffic for six months. Despite all these developments, the Indian aviation industry is facing several challenges, from financial crunch to flight delays, engine failures and lack of adequate staff.

Financial woes

Despite the growth in passenger traffic, many carriers are grappling with a severe financial crunch. Some of the reasons include high operational costs, intense competition, lack of profitable domestic routes and poor management.

India's aviation fuel taxes are among the highest in the world, about 30-40% higher than the global average.

Also, the intense competition between low-cost carriers has forced them to slash the airfares. While this has benefited consumers, it has caused severe financial strain on airlines, making operations unsustainable.

To add to it, many airlines in India have been plagued by poor financial planning and weak governance, leading to high debts, delayed payments of salaries and eventually bankruptcies, with Jet Airways being the prime example of this. The airline once boasted to be India's premier carrier but was forced to cease operations owing to financial insolvency.

Besides this, the traffic on the domestic routes often provides minimal profitability. While the government has mandated price caps on routes under the Ude Desh ka Aam Naagrik, (UDAN) regional connectivity scheme, it limits the revenues airlines can generate on these routes.

"Airlines need to survive the stiff competition. Currently, the scenario in the country is not viable. Although there is a surge in the number of fliers, the revenue generated from airfares alone cannot help airlines to sustain," says Pranjal Mehra, an aviation sector expert from Delhi.

"While the UDAN scheme is likely to benefit in the long run, currently, they are creating some challenges for the airlines. With high operation costs, the airlines need to find profitable routes to keep going. It's all connected and sometimes a vicious circle: technical glitches such as engine failures lead to flight delays, which in turn also add to the operational costs," he added.

To add to this, the Indian aviation sector faces stiff competition from international carriers, particularly those from the Middle East and Southeast Asia as they have more modern fleets and better financial resources and can therefore offer competitive pricing along with better services.

Traffic congestion and lack of runways

While Delhi, Mumbai, and Bengaluru are the country's major international airports, they operate above their capacity, owing to fewer foreign airports in the country. This leads to delays in landing and takeoff. The capacity of India's busiest airports has also failed to keep pace with the increasing number of aircraft movements, which again causes delays and also puts significant strain on air traffic control (ATC) systems in the country, said Mehra.

"Apart from all these issues, most airlines have to send their aircraft abroad for heavy maintenance as India lacks major overhaul facilities. This not only increases operational costs but also adds to downtime," he added.

Policy issues

While the government has taken steps to open up the aviation sector in India, the high taxation combined with various taxes and fees create issues for airlines and make India less competitive as a global aviation hub.

There are also delays in obtaining approvals and clearances for starting new airports or expanding the existing ones. The delays in infra work can have a deep impact on the project costs.

Staff shortage

While careers in the airline industry were considered to be lucrative a decade ago, the outlook has changed drastically in the past few years, as pilots and the airline crew are overworked. The constant delays in salaries lead to a lack of motivation among the airline crew.

"We were not paid for three months in a row in 2022. Last year too, our salaries did not come on time. During the pandemic, after the restrictions were lifted, we operated for months without salary and worked overtime because the airline I was employed with, wanted to make up for the losses incurred during the months the flights were non-operational. We have worked for 22 hours at a stretch on several days," said Pankhuri Rawat, who was employed with a national carrier till six months ago.

Aparajita Saini, another aviation sector expert, says one of the problems of the aviation sector is the lack of pilots as well as ground staff and engineers. ‘The lack of pilots has led to higher costs for airlines, as they often have to rely on expatriate pilots. This shortage also affects flight schedules and airline expansion plans," she says.

Apart from pilots, India also has inadequate ground staff.

"While airlines focus heavily on hiring flight crew, they often ignore the need to hire ground staff, ATCs, and aircraft engineers. While lack of pilots plays a crucial role in flight delays, fewer ground staff can cause inefficiencies in operations," she said.

The path forward

There is an urgent need for the government to expand and modernise airport infrastructure, particularly in major cities as well as build more tier-2 and tier-3 airports to promote regional connectivity.

Bringing taxes in line with global standards is another step to make airline operations sustainable.

Besides this, there is a crucial need to train pilots, engineers, ground staff, and air traffic controllers on an urgent basis to reduce the demand and supply ratio of these professionals.

While the Indian aviation sector holds immense potential, it faces several hurdles to ensure smooth operations. If the sector is made lucrative, it will see a rise in the number of investors and thereby help in its growth.