Good time to start airline as established players are too weak, says Capt.Gopinath

By Nirbhay Kumar

New Delhi, Aug 23 (UNI) Captain GR Gopinath, pioneer of low-cost aviation in India, has endorsed launch of Akasa Air, saying established players are currently too weak to take on new players with predatory pricing and resources such as pilots, engineers, aircraft and airport space are available cheap.

“When there are huge losses, airlines will try to increase prices to recover the losses but if you increase the prices it works against you. Because planes will not go full. So, that tactic they (establish) will not adopt now because they themselves are losing heavily,” Gopinath told UNI.

Centre for Asia-Pacific Aviation (CAPA) has estimated that pandemic-hit Indian carriers could together lose US$ 4.1 billion in the current fiscal, similar to what they lost in FY21, taking the total losses in two years to US$ 8 billion.

Gopinath noted that because of the pandemic, aircraft lease rental is quite competitive across the world putting new players in an advantageous position.

“So, the lease rental for the new players will be much less than the established players. This is also the time when a lot of people have been laid off. Lot of pilots, engineers and ground-handling staff are available. There is also no issue of airport space,” said Gopinath, the founder of Air Deccan.

He said while old carriers have debts, the new entrants will start with equity.

He, however, stated that there were risks and uncertainties related to Covid as the market has shrunk.

“The risk is it is also the time when the market has shrunk and uncertainty is there. There have been lockdowns and movement restrictions. There is always a fear of another wave. Also, there is a general tendency to not travel long distances. This will hit the new airlines also,” he said.

While sounding a note of caution, Gopinath emphasised, “There is risk but it is worth taking.”

He said that a large population (95 per cent) still does not have access to flying and, hence there is enough scope to expand the market. “The primary reason for this is the price barrier which new airlines will try to bring down.”

“New airline will open up new routes, new markets. They will be more efficient, they will be more hungry so it’s good for the customers and the country. It is good for the regions,” he said.

As per Ministry of Civil Aviation (MoCA), SNV Aviation (Rakesh Jhunjhunwala-promoted Akasa Air’s holding company) has applied for no-objection certificate (NoC) to start the airline.