Indian airlines must become positively competitive to stay afloat: Airbus CEO


TOULOUSE: Indian airlines should become positively competitive to make the country’s aviation market sustainable in the long term, a top Airbus executive has said while responding to the recent grounding of Jet Airways.

“India market is a very competitive one and I think the business model is a difficult one,” said Guillaume Faury, chief executive officer, Airbus. “Only recommendation is to always look at your competitors who manage their business better than the others. It is a competition and not everybody can be a winner, but things can change,” he told reporters, replying to a question seeking advice for Indian carriers in the light of Jet’s troubles.

Jet, once the country’s biggest private airline, suspended all its operations last month due to financial mess, despite air passenger numbers in India registering the fastest growth in the world in the past four years.

The demise of Jet has raised questions on the sustainable of the country’s aviation market.

Several experts have attributed Jet’s fall to cut-throat competition in fares.

Low-cost carriers such as IndiGo and full-service carriers like jet Airways — with much higher cost of operations — have been selling economy class seats at same fares to attract price-sensitive Indian flyers.

Travel industry insiders said Indian carriers have been flying at fares that were about 15% lower than the fare required to meet the average cost of their operations.

Airbus dominates the single-aisle aircraft in the country with IndiGo, Go-Air, Air India, Vistara and AirAsia India operating its aircraft.

The European airplane manufacturer is trying to make its mark in the long-haul airplane market, which is dominated by Boeing.

The only Indian carrier that operated Airbus’ medium and long-haul aircraft (Airbus 330) has ceased operations now.

Faury said the company is always looking for opportunity to expand its presence.

“We are always looking for opportunities and always see a market for our aircraft,” he said replying to a question on whether the company is pitching longhaul aircraft to its existing customers.

(The reporter was in Toulouse at the invite of Airbus)