The fleeting glamour of Indian aviation

On November 7, the Supreme Court passed an order liquidating Jet Airways, three decades after it took wing and raised the bar on service standards in domestic aviation.

- KANIKA DATTA

Five days later, 11-year-old Tata-owned Vistara, the airline that was considered Jet's successor in service values, flew into the sunset following a merger with Air India.

Both events—a bankruptcy and a merger—reflect the rollercoaster fortunes of the Indian aviation industry ever since the government announced its "open skies policy" in April 1990. Since then, India has seen almost 45 airlines turn defunct—most of them ceasing operations and others subsuming their identities following mergers, acquisitions, and internal restructurings.

Here's the eternal mystery. Aviation is one of the world's most precarious businesses, vulnerable to multiple unknown unknowns (war, oil price fluctuations, volcanic eruptions, and so on). Indian aviation, with its high cost structures (aviation turbine fuel, aircraft leasing, pilot training) and uncertain regulatory regime, is among the world's riskiest. Yet, in a country where access to capital is scarce and expensive, this capital-intensive business retains a magnetic glamour for the Indian business world. No matter how many failures, newer investors kept entering the fray.

Since 1991, the airline business has attracted all manner of backers—from, among others, a hatchery owner to the promoter of a dodgy chit fund, a ticketing agent, a liquor baron, politicians, an Udupi restaurateur, to a well-known stock market bull, and the chairman of India's largest conglomerate. Names such as GoAir, ModiLuft, Damania, Kingfisher have all entered the annals of aviation history.