The grounding of the full-service carrier Jet Airways should serve as a wake-up call in an industry, which is operating on a wafer-thin margin, The Hindu said in its opinion piece on Friday. Blaming reckless competition for the plight of the Indian airline sector, it said the airlines need to take stock of their collective plight and stop undercutting each other on fares.
The Centre can help too, by reviewing fuel taxes and surcharges apart from airport levies, which the airlines complain are too high.
“After all, a healthy airline industry can only be good for government revenue over the long term”, the opinion piece said.
The collapse of Jet has caused turbulence in the market and also raised some serious questions over why the domestic airline industry is proving to be so perilous for enterprises.
More than half-a-dozen private airline companies have fallen by the wayside in the last decade. Kingfisher was in the race to the bottom seven years ago, Air Deccan and Air Sahara before that and it is Jet now. Who knows which airline could be next.
Margins in the airline industry are wafer-thin at the best of times and the combined effect of rising fuel prices and the inability to pass them on to consumers due to competition has proved to be a deadly cocktail, it said.