[V.Narayan]

In response to several posts above on what ails our airlines industry my take is as follows. This is my own amateur view from what little I know caveated by that fact that being now in my second innings I am not a part of the industry on a day to day basis at all. So, to that extent my knowledge is jaded.

The product an airline sells has a two characteristics. First it is self-expiring like a hotel room or a newspaper. The moment the flight taxies out the unsold seat and its revenues and profits are lost forever. Think of a manufacturing business where a percent of your inventory must be thrown away each day.

Second the largest cost component outside depreciation and lease rentals is fuel cost with its uncertainty of pricing and tax rates. In India the latter are unusually high and States levy their own surcharges that add to making it more economically unviable. Govt's in India still see air travel as a game to be skinned to extract tax money from the rich. So, in short, a self-expiring product mixed with volatile input prices and relatively inelastic revenue prices and it is a recipe for a challenge.

To run an airline well anywhere in the world needs tight process discipline and lean work methods. The so called glamour is only a glean that has no relation to the process rigour. In India only Indigo and Vistara have it.

While many things in our aviation policy have gone right some have not. Things like the Udaan scheme, new airport terminals, new routes, privatization, are all big positives. Compared to 1989 we are literally more than light years ahead. However, two things DGCA has not learnt. First is to outgrow its deep and often vindictive inspector raj mentality. Second, upgrading the talent, knowledge and outlook of its staff. Third staying out of strategy, pricing and dispute settlements. For that we need an enlightened regulator with competent board of Govt & industry and independents. DGCA is a Govt department to oversee flight safety but due to lack of any other oversight body they willy nilly get dragged into higher issues for which they have neither the mandate nor the tools or knowledge. Airport Economic Regulatory Authority {AERA} was supposed to be one such body but has not fulfilled its promise. It should have been the Aviation Economic Regulatory Authority.

Coming to Go First or Go Air as it was known. First, I would not blame them for selection of P&W over CFM. It was a error many made and we are wise only in hindsight. P&W's new tech engine was supposed to be the new big breakthrough. Their fault lies in the fine print of the contract with P&W. That contract does not tie down P&W to warranty performance and provide replacements regardless of how many failures occur. Ordering 40 aircraft and a little over 80 engines does not give you the heft to make a giant like P&W kneel. For that you need 250 aircraft 550 engines orders life Indigo's. Then the buyer cracks the whip. Also the lease rental on a 250 order will be about 100 basis points cheaper than that on a 40 aircraft order. In an industry where every 10 basis points counts that is a chasm.

To add to this the Govt India, unlike Govt of China fails spectacularly in backing Indian companies facing situations with giant MNCs. In China, in a similar situation the CP of China would have made life miserable for P&W's existence within China. But not here. The same DGCA which will interfere in pricing, a matter beyond its remit will look the other way in situations like this!

Finally Go First was not a sharply run airline. Not as poor as the political game Spicejet is but not a Vistara either, middling somewhere in between. Wadia's clearly are not hands on businesspeople like the owners of Indigo. I saw it every day in the quality of forward planning and detailing in areas I would touch them. So, all these factors have merged together to form one sad implosion.

In the end coming to fares. Fares in India are quite low in general. Compared to the recent past, say 2003 they are a vast improvement in favour of the customer. If our fuel taxation were to be reduced by say 5 percentage points while not changing prices that would give the industry the leeway to build reserves and become profitable.

Hope this helps.

[Hayek]

Think Go Air suffered from loads of self inflicted wounds apart from the bad luck around the P&W engines. Their C suite has had a complete revolving door, and they have never demonstrated the ability to build relationships with any stakeholders. The Wadias are known to be very litigious - and I suspect they behaved in the same way with Pratt too. Needless to say, folks dealing with them would do the minimum that needs to be done legally - and would not go out of their way to help. What goes around, comes around. Not surprised with this outcome.

[phamilyman]

As someone who consulted for almost all private airports for a good part of a decade, and took easily 100 or so Go Air flights (10% of my lifetime flights) , I found their crew quite competent and decent and rigorous, even if lacking the panache and pride that Indigo has.

I only evaluate them on the operational minutiae - how rigorously they ensure boarding on time, how carefully they check seat belts or how well they brief folks in the exit row.

Indigo during Aditya Ghosh's time had cult like love for the management from the crew. No one remotely came close.

It could've been any one of us in the Go Air management.

Supremely easy for all of us (except Narayan sir who is an industry person) to talk negatively about someone in trouble, but life is too complex be explained in pithy posts.

Let's just wish the Indian government helps them and they recover asap. India needs airline competition for affordably low fares.

[AirbusCapt]

My two cents on this:
Goair has not been the best of run airline. The wadias (Ness and Jeh) are obnoxious, sometimes downright stupid and arrogant to a point in their almost daily interference in a business they know little about. Most professional CEO like Wulfgang ran away from Go Air after a short stint.
During the pandemic these idiots simply refused to pay employees and most of the pilots have about 7 months of unpaid salary. The result of this: the pilots can leave without notice and they are doing so.
Pratt and Whittney has made it clear that go air has pending dues and even though they will respect the courts I guess nothing will change unless the GoAir management pay for the engines.
Air india group, Vistara and IndiGo have open houses for pilots from the 4th of this month (today) and immediate offer letters are being given. By the 5th expect GoAir to have almost zero pilots.
The aircraft leasors have sent notices for aircraft recovery. In this overheated market expect the GoAir airplanes to be repainted to either AirIndia or IndiGo colors soon.
AirIndia and IndiGo have approached DGCA for getting GoAir slots in metros.
Spicejet is renewing 25 aircrafts in anticipation of taking over some marketshare.

Good luck in trying to restart an airline with no aircraft and no pilots.

[V.Narayan]

Originally Posted by AirbusCapt

My two cents on this:
Goair has not been the best of run airline. The wadias (Ness and Jeh) are obnoxious, sometimes downright stupid and arrogant to a point in their almost daily interference in a business they know little about. Most professional CEO like Wulfgang ran away from Go Air after a short stint <--->
The aircraft leasors have sent notices for aircraft recovery. In this overheated market expect the GoAir airplanes to be repainted to either AirIndia or IndiGo colors soon. <---> AirIndia and IndiGo have approached DGCA for getting GoAir slots in metros.

Good luck in trying to restart an airline with no aircraft and no pilots.

Thank you for saying it as it is. I wanted to say it but couldn't!!!!When you are more focused on your image as an alleged celebrity wanna be you really don't have time or aptitude for running a complex business. And they were poor paymasters to boot. I don't think the employees, or most of them in any case, will suffer. While each contract has to be measured on merit at least my extensive experience with P&W were almost completely trouble free. They are, like Boeing, Sikorsky, Bell a very customer centric outfit. I even once had a suit in USA where PW & my associate Co. were sued unfairly for a very large sum. Even though I was a minnow compared to PW they allowed us to be a co-defendant. Eventually the case was thrown out of court. It would be only fair to hear what PW has to say.

[WD-42]

While G8 might not have been the best run airline, and the owner/promoters did the professional managment no favours, I don't think we can absolve P&W either.

IMO, P&W's customer service has been comparable to those of food delivery/ride aggregtors, or online retailers.

Numerous airlines around the world have had large parts of their fleet grounded because of P&W issues, and haven't gone bankrupt only because they have large enough fleets, or are govt. subsidised and are able to absorb the losses.

Lufthansa:
Lufthansa AG said a third of its Airbus SE A220 fleet in Zurich has been temporarily grounded because of issues with Pratt & Whitney engines
https://www.bloomberg.com/news/artic...rich#xj4y7vzkg

Air Egypt:
"seven out of twelve Airbus A220s from EgyptAir are currently grounded due to the same engine issues"

Air Senegal:
Air Senegal originally planned to operate five of the A220s, but due to the engine problems, only one of the aircraft is currently parked, with the rest delayed.

Air Tanzania:
Air Tanzania, .... the country’s national airline is currently flying only one out of its four A220s in the fleet due to scarce spare parts and repair slots

Source for the above 3: https://airspace-africa.com/2023/03/...al-woes-mount/

Turkish Air:
Turkish Airlines faces “technical problems” with its Pratt GTF engines and has been forced to ground four planes, CEO Bilal Ekşi said in an interview.
Turkish Airlines is seeking leased engines and support from Raytheon Technologies Corp.’s Pratt & Whitney unit to repair its grounded Airbus SE A320neo aircraft ahead of the peak summer travel season, as more airlines grapple with defects on their powerplants ahead of the busiest travel season.

Air Baltic:
Air Baltic Corp AS CEO Martin Gauss said that Pratt “could not keep the given promise again” on improved turnaround times, and it was forced to lease additional capacity starting this week in order to operate its schedule. It had previously said that a quarter of its 40 Airbus A220 jets were out of service

Source: https://www.bloomberg.com/news/articles/2023-03-27/turkish-air-talking-very-seriously-with-pratt-on-engine-issues#xj4y7vzkg

There are a lot more airlines having trouble with P&W that I recall reading about over the least couple of years. These are just the ones I can find sources for where the management has actively complained in the press.

The CSeries is affected more than the A320 as it has only the GTF as a single engine option, unlike the 320Neo which has the Leap alternative. Most airlines inluding Indigo etc. changed their orders to the Leap as soon as they saw the GTF issues.

[NiInJa]

Big thank you to V.Narayan Sir for giving valuable insights on airline industry and specifically on GoAir. Also some interesting scoops by AirbusCapt and Phamilyman.

My question is if government milks this industry knowing very well that this may make operations unsustainable, why hasn't this been sorted out in such a way that everyone goes home happy? It is not like this industry is in nascent stages and both parties are still in learning mode.

I have been a victim of this twice, back in 2014 when Spicejet cancelled our flight 6 hours before takeoff as they didn't have money to fill fuel in their planes, and now this...

Originally Posted by NiInJa

My wife and kid are due to fly from Delhi to Pune on Sunday 7th. And unfortunately the flight is GoAir !

My wife's GoAir flight of 7th May is cancelled and she now has to pay INR 15000 extra to get another flight ticket. (In 2014 I had to book another flight from Port Blair to Mumbai for INR 55,000, and that was the cheapest with route from Port Blair-Kolkata-Delhi-Mumbai )

After a lot of anger and frustrated talk, she patched up with me saying next time I am going to select an airline by comparing their balance sheets. These ticket booking portals really should show airline's financial health while booking tickets

[govindremesh]

It seems Airbus has kind of highlighted their disappointment with PW. From what I infer, the faster degradation of engines in hot & dusty climate is leading to spares being prioritized, thus affecting new aircraft delivery, as per the article here at Reuters

[svsantosh]

Air Passengers will pay the price eventually. Just like all other riches to rags story. Wadias still wont be touched, P&W are well covered, their exposure is a 2nd decimal write off at the most. Spare a prayer for the poor families of flying employees and related ground staff who live from pay-cheque to pay-cheque.

The least our Govt can do is cap and monitor the competitors prices until the dust settles down and # of flights come back to normal levels.

[aaggoswami]

Originally Posted by NiInJa

My question is if government milks this industry knowing very well that this may make operations unsustainable, why hasn't this been sorted out in such a way that everyone goes home happy? It is not like this industry is in nascent stages and both parties are still in learning mode.

My wife's GoAir flight of 7th May is cancelled and she now has to pay INR 15000 extra to get another flight ticket. (In 2014 I had to book another flight from Port Blair to Mumbai for INR 55,000, and that was the cheapest with route from Port Blair-Kolkata-Delhi-Mumbai )

Had a ticked booked from Go Air just for the sake of its time slot, it was around 3 hours earlier than Indigo flight. However, as soon as Go Air news was flying around, I booked Indigo, at that point of time, it seemed like waste of money and to an extent it still is. But I cannot miss the trip, so had to bleed money. Yesterday night I got message that my Go air Flight is cancelled, checked and rates for Indigo flight which was next, had flared up. Hopefully I will get full refund, ideally I should.

Go Air's financial health wasn't good and I think Government/DGCA should be aware of it and appropriate steps should have been taken in advance to avoid such a fall out. Wondering why this sector has seen so many failures and also has consumed quite a bit of government money too till Tata took over Air India. Rather than milking, if needed, the aviation sector needs to be nurtured towards better health.

EDIT : DCGA orders timely refund. Link.

[Neversaygbye]

Coming from a family that has strong ties with the aviation industry (my father worked in IA and then AI and Indigo all his life and my brother is a pilot with Alliance Air), I know that the industry by its very nature is very competitive and low margin plus India has its own set of additional cost challenges - primarily ATF and airport charges, which are among the highest in the world.

One thing that differentiates other countries is the availability of cheaper secondary airports. Many countries have specific LCC terminals where the aircraft handling and parking charges are lower than the main full service terminals. So a low cost model in India is basically a low ticket cost model - it may not be sustainable in the long run for a LCC because the expenses are the same as any full cost airline.

I'm not absolving the G8 management team here - obviously even with the challenges it is possible to not only survive but also thrive, as Indigo has demonstrated. But running a tight ship and controlling costs are the key to doing that. I have learnt from reliable sources that Tata is now cracking the whip on Air India and I'm hoping that we will see results soon, but apart from tight management, the centre and states also need to stop treating aviation as a cash cow because that is one thing that this industry is not.

I doubt that so many airlines have failed in so little time in any other country. In 30 odd years we have seen East West, Damania, Air Deccan, Sahara, Kingfisher, Paramount, Jet Airways and now G8 all bite the dust (maybe I'm missing a few names here). Spicejet has come close to going bankrupt twice - it is only political patronage that is keeping it alive.

[Newtown]

Originally Posted by V.Narayan

That contract does not tie down P&W to warranty performance and provide replacements regardless of how many failures occur. Ordering 40 aircraft and a little over 80 engines does not give you the heft to make a giant like P&W kneel. For that you need 250 aircraft 550 engines orders life Indigo's.

But sir, was it not mandated by the FAA that P&W needed to replace the stage 3 blades of the LPT on the PW1127GA-JM? What I am unable to understand is whether this was done or not to the G8 fleet. Globally I was of the understanding that this was addressed, and things were business as usual now.

[sunilrs]

The Indian air market is now effectively a duopoly between Air India and Indigo. Akasa is still in early stages and yet to get significant volumes and it seems unlikely Jet Airways will take off in the near future. I am very unsure about SpiceJet and would rather travel by train than board one of their aircraft. Given India's growth in passenger numbers, we definitely have space for at least one more FSC and 1 more strong LCC to operate in the market. Otherwise the pricing power will shift even more in favour of airlines vs. customers. I do hope GoFirst manages to recover and get back into the game.

I also find the Government's push to restrict additional rights to foreign carriers to protect Indian carriers strange when the Indian market itself is capacity strained. Let Air India get its act together first before indulging in protectionism, they have barely acquired a fraction of the planes they need to improve their product. Ultimately the price for this will be paid from our wallets.

I only hope that the rail services continue to improve at a fast pace so that at least we have an alternative to flights. The Vande Bharat sleepers and say a 12 hour journey between Mumbai Delhi or Mumbai Bangalore would make a lot of sense apart from being environmentally friendly.

[W.A.G.7]

Good Lord! We flew from Srinagar to Delhi on 24th April aboard a GoFirst flight and we had no inkling that such a thing was happening behind the scenes. To be honest, we found the airline quite decent in terms of travel coordination. I didn’t know they were on the brink of bankruptcy. I only hope that Indigo and Air India up their ante so much, that even if a duopoly continues, at least we have a decent choice from both these carriers. Next time onwards we are only flying either of these two airlines.

[pgsagar]

Originally Posted by Neversaygbye

I doubt that so many airlines have failed in so little time in any other country. In 30 odd years we have seen East West, Damania, Air Deccan, Sahara, Kingfisher, Paramount, Jet Airways and now G8 all bite the dust (maybe I'm missing a few names here). Spicejet has come close to going bankrupt twice - it is only political patronage that is keeping it alive.

Yes. Trujet and Air Costa. Not sure how many heard of these regional careers operating out of Hyd. Anyway, they're gone now.