Winning Bizness Desk
Mumbai. What makes every aviation expert interesting is that the business of aviation services is increasing in the country, but the number of companies operating in this industry is diminishing. As of now, Indigo and the Tata group have over 81% market share on domestic routes. Out of the remaining 19%, about 15% stake is held by two companies. One of these GoFirst has stopped operation and the condition of SpiceJet is also not so good. Experts say that the domestic aviation sector is moving towards duopoly. This means that only two companies or groups will dominate the market. To say that there are 15 airlines in the country, but only 7 are operational. Of these, two (GoFirst and SpiceJet) are in bad financial condition and two (Air India, Vistara) are about to merge.
The duopoly situation is clearly visible
According to S Ranganathan, Head of Research, LKP Securities, “The duopoly situation is clearly visible. It does not seem possible for Jet Airways to start operations. Aakasa operator is doing it, but in name. The company does not even have a market share of 0.5%. Be aware, on April 30, Civil Aviation Minister Jyotiraditya Scindia had told that a record 4,56,082 passengers flew in 2,978 flights. Two days later, on May 3, GoFirst stopped operations.
Go First incurred a loss of Rs 1,346.72 crore in 20-21
According to the company's website, Go First incurred a loss of Rs 1,346.72 crore in the financial year 2020-21. It increased to Rs 1,807.8 crore in 2021-22. As of April this year, GoFirst has a total debt of Rs 11,463 crore. An aviation consultant said that since 2008 most of the Indian airlines are in loss. Companies like Jet Airways, Kingfisher shut down. Some were sold. However, Indigo kept on expanding. Tata Group is also on the same path. Both have strong balance sheets. According to data from aviation regulator DGCA, domestic air traffic grew by 15% in April. Last month, 4.3 lakh passengers traveled by flight daily. In comparison, in the financial year 2022-23 that ended in March, an average of 3.73 lakh people took flights daily.
