Major challenges ahead for aviation industry

Turbulence in aviation industry due to unrelenting increase in oil price is a matter of deep concern for all airlines. Indian carriers which were until recently in a robust mood are now feeling the heat. Country’s aviation industry got the fillip with the opening up of sky by the Government in 90s. Everyone talked about India’s high-paced economy and subsequent growth for the aviation industry. All major worldwide studies predict India and China to be driving forces behind the aviation growth in coming decades.

The question today arises weather the Indian aviation industry which is still in a nascent stage can survive the heat. Most, if not all airlines in the country have reported losses not just for the third and fourth quarters, but the whole of 2007-08. And this is not any different for other airlines worldwide. So, how should the industry respond to the situation? For the time being, most airlines have resorted to cutting routes, issuing e-tickets and charging for items such as snacks and checked-in luggage to cut their losses. Some, however, have also hiked fuel surcharges to offset high ATF rates. There are a few who are even considering selling their stake. But is this the solution when the ATF prices have doubled over the last year and now form almost 80 per cent of overall operating costs and almost three-fourths of a budget airline's ticket fare?

The industry has tough challenges ahead. Not only it has to survive the current turbulence but also it has to maintain the growth to keep the momentum going. Another challenge would be to counter green house gas emission by aircraft. Environment studies warn that emissions from aircraft are rising dramatically, with the prediction saying it will be more than double over the next 20 years. It says China and India are behind the global boom in aviation and suggests Governments should step in to tax aviation.

Aircraft manufacturing major Airbus and Boeing are working alongside engine original equipment manufacturers (OEMs) and airlines to pursue development of sustainable bio-fuels. They are constantly redesigning and re-engineering aircraft, developing lighter composite materials, more aerodynamic designs and more efficient engines. Every new generation of aircraft is more efficient, with a greater reduction in fuel-burn and emissions.

Industry’s more emphasis should be on improving the efficiency of engines in order to reduce fuel burn. It should invest more on new technology and exploration of alternative fuel sources. It needs to come up with some sort of solutions in that area. But it's still very much early stages. Within the next few years, commercial use of alternative fuel sources is a possibility. It’s not a dream. It's a necessity. It's something that the industry, and all those associated with the industry, will have to come to grip with. Major challenges are ahead for the aviation industry.