Academy of Marketing Studies Journal (Print ISSN: 1095-6298; Online ISSN: 1528-2678)


Exploring the Socio-Economic and Technological Situation of Indian Aviation Industry

Author(s): Ashutosh Kolte, Balkrishan V. Sangvikar, Komal Tilak Shettigar and Kevin Francis Joy

India, a country where train travel has been the most common mode of transport, the airline sector has settled itself as a safe, economical and convenient alternative, whose demand has increased rapidly over time. India has one of the fastest growing aviation markets in the world. With a growing population of approximately 1 billion people in the 1990s, India’s prospective for further growth and industrial expansion was very clear. Before the 1990s, the aviation industry was untouched by many private companies as the major players were public sector companies. After the incorporation of liberalization, privatization and globalization (LPG) in India, many realized the possible exponential growth in the aviation industry. There was a rise in the entry of private sector companies in the aviation industry in India. It was a very competitive and booming sector which helped in the growth of these companies and created huge profits. However, their story did not last long. The last decade has seen a downfall in the profits of these private companies, due to high operating costs such as the maintenance of Indian aircrafts in the USA, unstable exchange rates influencing these costs, continuous rise in the Aviation Turbine Fuel (ATF) prices, rapid increase in competition in a market full of private companies, and other factors that have resulted in the poor financial stability of the Indian aviation sector, have helped in our attempt of predicting the financial stability of Indian airline operators, which are studied in this paper.