Economics Project

Nakul Talwar
Class 12th, Calor
Shikshantar

1
 Acknowledgement
I would like to thank my teacher Swati Didi for guiding me
throughout the project.

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 Index

Topics Page

Introduction 4

History 4

Effect of Aviation Industry on the Indian Economy 5-6

Comparison between Public and Private Sector 6-7

Market Structure and Composition of Indian Civil Aviation 8-9

Types of Airlines 10

Airline Business models 11

Operational Strategies Adopted by Selected Airline and SWOT Analysis 12

Challenges Ahead and Conclusion 13-14

Bibliography 15

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 Introduction

The aviation sector brings immense growth to the communities and economies around the world and
also plays a critical role in economic growth, social development and tourism. It is the business sector
that manufactures, maintains, and operates the aircrafts and the airports. When it comes to aviation,
there is a broad range of responsibilities within. It comprises activities at the airport as well as in the
aircraft. It involves ground duties that are required to perform before the flight takes off, the activities
during the flight and the activities after it lands.

Air transport is one of the world’s most important industries. Its development and its technical and
service achievements make it one of the greatest contributors to the advancement of modern society
India has 464 airports and airstrips, of which 125 airports are owned by Airport Authority of India (AAI)
and the civil aviation industry in India has emerged as one of the fastest growing industries in the
country.

It helps in connecting different continents, countries and cultures. As a result, global aviation has been a
key in facilitating efficient travel to distant places, enriching many lives in the process. Additionally, it also
been a key contributor to global economic prosperity, not only as a result of the tourism industry
boosting local economies, but also because it has allowed for improvements to global trade.

In this project I will be covering various topics from ranging from the History of Indian Aviation to what
the sector has become today with the main Indian airlines present, their effect on the Indian Economy,
operational strategies adopted by them and more about this sectors.

History

The first commercial aviation flight in India took place on 18 February 1911. It was a brief demonstration
flight of about 15 minutes from the Allahabad across the Yamuna River to Naini which covered a distance
of about 10 km. The aircraft was a small Humber Biplane which carried about 6,500 pieces of mail
making it the first official airmail service. About 2 decades later in 1932, regular air mail was established
by J. R. D. Tata who founded the airline ‘Tata Services’ which became ‘Tata Airlines’ and then finally how
it is known by now by the name is ‘Air India’.

J. R. D. Tata was the chairman of Air-India for the next 25 years and also a director on board of Indian
Airlines, which was formed by the merging of the 11 domestic airlines which sprang up after the
American Tenth Air Force in India, disposed of its planes at throwaway prices.

Until a decade ago, all the aspects of aviation were strictly controlled by the government, with the
Directorate General of Civil Aviation controlling all aspects of flying including certifying aircrafts for flight,
granting flying licenses, issuing rules and procedures on Indian airports and airspace, etc. Later this
responsibility was given to the Airports Authority of India and all national and international airports were

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managed by them. In the early nineties, some important changes took place in Indian aviation, most
importantly the Air Corporation Act was repealed to end the monopoly of the public sector and private
airlines were introduced.

Effect of Aviation Industry on the Indian Economy

Employment:

The Aviation Sector provides large scale employment opportunities. It creates direct job opportunities
for handling airline and aircraft operations, aircraft maintenance, baggage handling, catering facilities,
etc. Some examples of direct job opportunities created by these are:

1. The Civil Aerospace Sector which composes of people and entities who manufacture aircraft
systems.
2. Workers for airline who work as flight crew, maintenance staff, etc.
3. Personal to work at the airport such as security, airline ticket agent and also the personal who
work at the stores in the airport in restaurants, retail outlets, etc.

The Aviation Sector also creates a lot of indirect jobs. Some of the jobs generated indirectly by the
aviation industry include fuel suppliers for the airlines, construction companies if additional facilities are
to be built, manufacturers of the goods sold in the retail shops in the airport, etc.

Businesses Flourish:

The aviation sector enables businesses to grow faster as firstly, the air transport offers relatively cheap
and easy transportation services, providing a bigger market for the business which is on a global scale. As
the market expands the business gets more customers and benefits the business. As the market
expands, it also leads to more competition between businesses which can lead to companies reducing
their prices while increasing the quality and efficiency of their goods and services. Secondly, air
transport makes meeting customers easier and the contact between the buyer and seller is more
efficient. It also provides a fast and reliable medium of delivery of the goods and services. Lastly, this
long distance process of buying and selling initiates the development of e-commerce as buyers can buy
goods from a wide variety and sellers can sell their goods globally through websites sitting in the comfort
of their homes. This also helps in the development of the express carrier industry which is needed in the
shipping of these goods from one location to another.

World trade:

Air transport plays a critical role in developing international trade which then in turn helps in the
economic growth of the countries. Specialization of goods is also increased as countries which specialize

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in one line of goods are able to trade with countries who specialize in some other line of goods, and thus
both sides can attain the goods which are scarce in the country but in demand. The aviation industry
offers an easy and efficient transportation system which different companies are able to make use of to
expand their market and reach their customers faster and worldwide. More companies have started to
import their goods to other countries to establish international markets to cater to their customers’
needs and thus improve the standard of living of people.

Tourism:

The aviation sector affects tourism heavily. The tourism industry depends on visitors to make use of its
services, which is met by the aviation sector. Air transport allows people to travel to new destinations
where they can thus make use of the tourism services to travel and explore new places. This is also a
source of foreign exchange as people might trade in the money they have for the currency used in the
destination.

Comparison between Public and Private Sector

The objective of airport management is to provide a variety of services and facilities to the public and
airlines. Airport services have been seen as public utilities for many years due to the huge amount of
money and resources needed to run them and also because of their monopolistic position in the region,
and were treated as public establishments in most countries. The situation has long changed since then.
Airports and airlines are now facing increasing operational costs, capacity constraints, commercialization
trends and high customer expectations, which has led to the privatization of many airlines and the
transformation of airports into commercially focused business enterprises and in some cases even
leading the government to turn airports into private entities. There are also airlines which are neither
private nor public but have a hybrid or mixed public-private ownership. Some differences between public
and private sectors in aviation are:

1. Definition –

The Public Sector refers to the part of the country’s overall economy which is controlled by
Government or various Government bodies whereas the Private Sector refers to the part of the
country’s overall economy which is controlled by individuals or private companies.

2. Ownership –

Public Sector companies are owned and managed by Government/Ministries/State

Government/Government Bodies, whereas Private Sector companies are owned by private
individuals and private companies.

3. Funding –

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 The Airlines in the Public Sector get all possible financial support from the government even in
adverse circumstances wherein financial health of the companies is not good, whereas the
Private Sector gets very little to no support from the Government unless a private entity is too
big and systematically important for the country. Although Private sectors in airlines are very
well funded by rich and wealthy groups of people who want to invest and they are thus full of
luxuries as they have surplus funding, while in the public sector airlines the funding provided by
the government is sufficient but not more than enough so the airlines are not as luxurious as
compared to the private ones.

4. Profitability –

Companies in the Public Sector are relatively less profitable because of their primary purpose of
not being profitability driven. Public sector airlines have ‘Full Service’ tickets which means they
get all the in-flight amenities including sufficient luggage and leg space included in the price of
the one ticket, whereas even though the tickets of the private airlines are around the same price,
they have some ‘Hidden Costs’, such as paying for more luggage space and leg space or the in-
flight amenities such as the meals on the flight, services for the old age (assistance in boarding
and disembarking) etc. which are not provided in the price which is paid for the ticket. Thus
making private sector airlines more expensive and their aim of profitability is met with.

5. Government Interference –

Since the Public sector companies are owned by the Government, therefore they are subject to
the uncertainties related to unfavorable Government decision and larger Government
interference. Private Sector entities though are relatively less exposed to Government
interference.

6. Ease of Doing Business –

Public Sector companies find is relatively easy to operate in a country because of its proximity
with the government. On the other hand, Private Sector companies find is relatively difficult to
operate and manage the regulatory issues and compliance in a country in comparison to Public
Sector companies.

7. Work Culture for Employees –

The Public Sector airline employees receive less salary than the private sector, but are instead
awarded with job security and the older employees also get bonus salary along with pension
which they receive post retirement. The public sector also generates more jobs. The private
sector airline employees on the other hand receive salaries which are performance based. For
example exemplary pilots who save fuel on flights might receive a bonus on top of their normal
salaries, but the employees here do not have job security and old employees might be replaced
with younger ones. The work culture here is thus competitive.

8. Links –

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 Public sector airlines have a wider selection choice of destinations as their main motive is service
to the customers and they fly to all destinations not regarding whether it will be profitable or
not. Private sector airlines on the other hand have less destination choices to choose from as
their main motive is not service to the customers and they fly to destinations where the most
profitability achieved.

Market Structure and Composition of Indian Civil Aviation

There are three types of market types:

1. Competitive Market

2. Monopoly

3. Oligopoly

In a competitive market, numerous producers who sell the same products or services to the consumers,
each producer selling the goods or services to a fraction of the market and thus don’t have any influence
on the market price.

In a monopoly, there is only a single producer who supplies the customers with the goods and services,
and thus has the ability to set the price by restricting output.

Lastly, an oligopoly is a market structure that lies in between the two categories (perfectly competitive
market and monopoly), with a few manufacturers controlling substantial parts of the market. Pricing in
an oligopoly is in between a perfectly competitive market, where market players have no pricing power,
and a monopoly, where a single producer can set the highest price.

The civil aviation markets throughout the world are not characterized as perfectly competitive markets,
and are either monopolistic or oligopolistic market types. India’s civil aviation sector has a large number
of passengers and cargo with a small number of airlines which have significant market share, significant
cost barriers to market entry, differentiated services, and competitive firms affecting each other‘s
business decisions. These characteristics thus make out India’s civil aviation sector to be of oligopolistic
market structure.

India’s civil aviation sector has changed considerably over the last few decades transforming from a
market tightly controlled by the government with only two air carrier service providers to a relatively
competitive market with a small number of domestic and international carriers.

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The carriers which dominate this industry type are Indigo, Spicejet, Air India, GoAir, AirAsia India and
Vistara.

1. Indigo:

Indigo which was started in August 2006 on the foundation of three pillars – offering low fares, being on-
time, and delivering a courteous and hassle-free experience, is now dominating this industry being
India’s largest passenger airline with a market share of 54% as of april 2021. With 10 consecutive years of
Profitable operations, its fleet consists of 274 aircraft including 124 new generation A320 NEOs, 80 A320
CEOs, 29 ATRs and 41 A321 NEO, and flies to 67 domestic destinations along with 24 international ones.

2. SpiceJet:

SpiceJet was established by Indian industrialist S. K. Modi to provide private air taxi services and has now
evolved to the second largest airline in the country by number of domestic passengers carried with
12.8% of market shares. It is an Indian low-cost airline headquartered in Gurgaon, Haryana. And its fleet
comprises of Boeing 737s and Bombardier Q400s, along with a growing freighter aircraft fleet.

3. Air India:

Air India is the flagship carrier airline of India and is owned by Air India Ltd. It began its operations in
1932. Presently, it is the third largest airline in India with a market share of 12%. Headquartered in the
Indian Airlines house at New Delhi. Air India has two major domestic hubs at Indira Gandhi International
Airport, New Delhi, and Chhatrapati Shivaji International Airport, Mumbai. Air India became a member
of the Star Alliance on 11-July-2014. Furthermore, it operates the most diverse fleet of any Indian airline,
flying the A320 family, 747s, 777s, and 787s, covering domestic and regional destinations, as well as

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international services to Asia, the Middle East, Europe, and North America.

4. Go First:

Go First, founded as GoAir, is an Indian ultra-low-cost airline based in Mumbai, Maharashtra. Go First
was founded as GoAir in November 2005 by Jeh Wadia, son of Indian industrialist Nusli Wadia and is now
owned by the Indian business conglomerate Wadia Group. It comes in the fourth position with a market
share of 9.6%, operating a fleet of 55 mainly A320neos and a handful of -200s, but only flies to 28
domestic destinations from its hubs at Mumbai, Delhi, Bangalore, Kolkata, Chandigarh City and Kannur.

5. AirAsia India:

AirAsia is a low cost carrier based at Kuala Lumpur International Airport, Malaysia. The carrier, was
established in 1993 and began operations on 18 November 1996, and is now led by CEO Tony Fernandes
and pioneered the cross-border joint venture in Asia, establishing Thai and Indonesian units with bases
in Bangkok and Jakarta. It is the largest airline in Malaysia by fleet size and destinations. AirAsia Group
operates scheduled domestic and international flights to more than 165 destinations spanning 25
countries. It comes in at fifth place with a market share of 6.2%, and has been named as the world's best
low-cost carrier for 11 years by Skytrax in a row in international travel and airline awards, including the
latest award for 2019. Its fleet comprises of all-Airbus A320 carriers.

6. Vistara:

Vistara is a joint venture of Tata Sons Private Limited and Singapore Airlines Limited (SIA), wherein Tata
Sons holds 51% stake in partnership and Singapore Airlines owns 49% stake. It is an Indian full-service
airline, based in Gurgaon, with its hub at Indira Gandhi International Airport and serves 37 destinations
across 9 countries. The carrier, a joint venture between Tata Sons and Singapore Airlines, commenced
operations on 9 January 2015. It comes in at sixth place with a market share of 5.4%. It is domestic
airline with a fleet of Boeing 787-9s.

India’s civil aviation sector’s oligopoly market structure is a bit different with a few firms providing
services different enough which might be in terms of quality, frills offered, etc. This is known as a
differentiated oligopoly, in which a few firms produce products different enough for each firm to have
some control over the price of their service. As with a perfectly competitive firm or a monopoly, the
differentiated oligopoly firm produces at a profit maximizing the level of output where marginal cost
equals marginal revenue. The strategy of each firm also depends on the behaviour of the rival firms.

Types of Airlines

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In today’s date, different types of airlines are created equally and there are different sizes, styles and
configurations which are created to suit the needs of the customers. For example if a person needs to
travel a long distance overseas, then the customer can approach an international airline because it will
have more destinations options to choose from overseas, whereas if the customer wants travel a short
distance between two cities, they will approach a regional airline which covers shorts distances directly
and he will not have to waste his time stopping at an international airline hub for a layover. The size and
styles of the planes differ too to make the flights more efficient and maintain profitability, with regional
airlines having smaller airplanes (as larger planes mean more fuel consumption and more servicing
costs) consisting of about 50-80 seats while international airlines usually do not even fly aircrafts with
under 100 seats. There are three category of airlines, namely International (Major), National and
Regional.

1. International (Major) Airlines:

This is the largest type of airline and these are the heavyweights of the airline industry. The
airlines which generate operating costs of more than 1 billion dollars annually are characterized
into this airline type and these types of airlines also employ the most people out of the three
types of airlines. Some examples of Indian international airlines are Air India, Vistara and Indigo.

2. National Airlines:

These airline types serve certain regions of a country and may also provide long distance routes
with some international destinations, and usually generate operating costs between 100 million
and 1 billion dollars annually. These airlines operate medium and large sized aircrafts.

3. Regional Airline:

Regional airlines offer services to particular regions of a country and are the smallest of the
three types of airlines. Regional airlines are further divided into three groups.

i. Large Regionals: These are carriers that generate operating costs of 20-100 million
dollars annually and operate aircrafts that can accommodate more than 60 passengers.

ii. Medium Regionals: These are carriers that operate on a smaller scale than the large
regionals with operating costs under 20 million dollars annually.

iii. Small Regions: This type does not have specific operating costs but use small aircrafts
which can accommodate less than 60 passengers.

Airline Business models

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Some airline tickets are more expensive as compared to others while some are really less as compared to
others. This happens as different airlines vary from each other in its product offering, value added
services, target customer, etc. There are two main airline business models that have been formed,
namely Full Service Carrier (Legacy or FSA), Low Cost Carriers (LCC). Some differences between these two
business models are:
Element
Low fares
Cabin Class
In-Flight Meals and Snacks
Amenities and Extras
Frequent-Flyer Program
Full Service Carrier
These have costlier tickets as
compared to LCC’s.
The aircrafts used here are
bigger and have a variety of
cabins to choose from such as
economy class, business class
and first class and the luggage
and leg space provided is also
bigger along with more
comfortable seats.
All the in-flight meals and snacks
are provided free of cost or
considered paid for when the
ticket is bought. On long
international flights up to two
meals and even snacks are
available.
All the extra amenities are
provided, such as pillows,
blankets and bathroom kits on
long flights, slippers and
sometimes even a change of
clothes for sleeping, drinks,
lounge access in the airport for
relaxing while waiting for the
flight, etc.
A frequent-flyer program is a
loyalty program which is offered
by these airlines. By enrolling in
these programs and booking
flights, points can be earned
which can later be used to pay
for a part of the fees for the
flight.
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Low Cost Carrier
These have cheaper tickets and
generally attract more customers
because of this.
The aircrafts used here are
smaller and only economy class
cabins are installed in these
planes along with business class
cabins in some aircrafts. Thus
seats are small and leg and
luggage room is small.
All the in-flight meals and snacks
including even water cost extra
in low cost airlines. Meals are
pre ordered in these budget
airlines or can be reserved later
at a price, but there is not much
choice in the meals provided.
Low cost airlines are cheaper and
do not provide any extra
amenities. Some airlines may
have some limited extra
amenities such as a pillows and
blankets on long flights, but
everything is at an extra cost.
These airlines don’t have
frequent-flyer programs but
some airlines have membership
programs to offer some limited
perks to the passengers.
 Operational Strategies Adopted of the Selected Airlines and SWOT Analysis

Indigo

1. Fuel:

Indigo’s whole fleet consisted of Airbus A320 which helps to reduce its running and fuel costs since the
Airbus offers more fuel-efficiency and during these times when the fuel prices are increasing rapidly,
airline value fuel cost savings. Indigo does not stop here and more steps are taken to conserve as much
fuel as possible. Only one engine is used to taxi the aircraft to the terminal with the other engine
switched off and the aircraft are also flown at an optimal speed to maximize their fuel efficiency.

2. Single Class:

Unlike other airlines, Indigo’s aircrafts do not offer business or first class cabins to passengers so that
they do not have to spend more time, money and crew on privilege passengers, interior designing and
luxury items which are provided to the people flying in such cabins, saving these costs to design the
interior in such a way as to maximize seat count in the aircraft.

3. Low Average Fleet Age and Debt:

Indigo has an average fleet age of less than 3 years. A younger fleet age means less maintenance costs.
This is done as all of its aircrafts are leased for a period of 5-6 years. Thus, in this way they avoid the D-
Check which is one after 8 years of operations of an airplane as a D-check takes up to 2 months during
which the aircraft is not operational. IndiGo had six-year sale and lease back agreements for most of its
planes. These agreements helped the airline to free up financial resources, as it did not have to take
bank loans to procure aircraft. At the same time, the agreement helped the company ensure that the
fleet was new, as planes that had been used for more than six years were returned to the lessor. The
company also went one record to say that they have no debt.

4. Turnaround-Time:

Indigo has a very less on-ground time with a turnaround time of about 20 minutes. An airline is charged
for the duration its aircraft stays at the airport and thus Indigo keeps it on-ground time schedule well
planned so that some work is assigned for every minute and no time on ground is wasted unnecessarily,
thus reducing on-ground costs.

5. No Frills:

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  On-Flight food is not provided for free as some passengers may not want to eat food while on
board and thus ticket prices are reduced as customers are not made to purchase something they
do not want.

 The airline is ticketless with online check-in so that the customers do not need to worry about
collecting their tickets before the flight and the costs of paper and printing for the ticket are cut
down.

 Guests receive boarding passes with pre-assigned seats and are not allowed to request for a seat
change unnecessarily. If the guests have preferences on where and whom they would like to sit
with, they are able to do so by paying a small sum when checking-in.

 No refunds are available so that no time and money is wasted when a passenger does not show
up.

 Indigo uses secondary airports as operating costs are cheaper in these as compared to the major
airports and thus cut down more on operational costs.

6. Other Measures:

 Some passengers can be very cost conscious and this IndiGo maintained a single brand image. It
started as an LLC and continued to remain one. This helped the company project a clear image
among the travelers, who were sure that IndiGo would take them to their destination at the
lowest price.

 While pre-flight briefing is very common in the airline business but Indigo also conducts post-
flight briefing. This is done to understand how further improvements can be made in the overall
operations.

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 SpiceJet

1. Fleet Strategy:

SpiceJet keeps a homogenous fleet so that the same flight and technical crew can be used for all aircrafts
which reduces costs significantly. In addition to this, they aimed to connect the under-flown regional
destinations with smaller aircrafts, but this additional strategy did not work out well for them.

2. Product Strategy:

To give the customers more choice so that passengers can decide how to fly according to their budget,
SpiceJet has divided their service into two categories –

 Economy Class – This class targets travelers who do not want to spend much and just want to

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 enjoy the flight with the standard service.

 SpiceMax – The passengers who want a premium service on their flight can choose to pay more
and take this with which they get additional on-board leg space, a complementary meal is
provided, bigger seats are available and priority bag check in and priority boarding facility is also
provided.

3. Pricing Strategy:

SpiceJet faces tough competition from other Low Cost Carriers and thus follows competitive pricing in its
marketing mix strategy by offering a mix of both low cost ticket and decent onboard facilities to its
travelers. In addition to this, discounts to students or senior citizens along with various schemes such as
SpiceCash (travelers who travel by this airline frequently can collect SpiceCash as reward points for
getting discounts or getting a service upgrade) are available to passengers.

4. Advertising Strategy:

SpiceJet puts up banners and ads at airports and other prime locations, also doing many humorous
campaigns for promoting its services. It also promotes its app by giving out special discounts on booking
tickets from the app.

Challenges Ahead and Conclusion

Air transport area is one of the world’s most prominent patrons to the headway of current society. It has
made the world a worldwide town. Air transport gives around the world transportation fundamentals for
worldwide business and the travel industry. Air transport assumes an indispensable job in encouraging
financial development, especially in creating nations. Nonetheless the Indian Airlines despite of being
the fastest growing market have been one of the toughest aviation markets in the world due to high fuel
prices, intense price competition, etc. Some of challenges faced are:

1. Increase in Fuel Prices:

Aviation turbine fuel (ATF) is one of the important sections of the industry and remains to be the
biggest concern faced by the airline industry in the modern world. The Indian government does
not reduce jet prices in proportion to the fall in international crude prices, but when there is a
rise in crude prices it increases in the fuel cost which eventually increase the operation costs of
airlines. As fuel costs keep increasing, so do the operation costs of airlines with a respective
increase of flight tickets.

2. Higher Airport Cost:

Airport charges levied by the airport authority of India are high, and these charges payable at
international airports are even higher than those at the airports designated as domestic airports.
So the domestic airlines in India incur additional costs at the international designated airports

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 without utilizing any extra facilities.

3. Competitiveness:

There is a fierce competition between airlines. The competition has increased even more due to
low cost airlines which offer tickets at the lowest prices forcing other airlines to decrease their
prices too. The established airlines are also threatened by low cost carriers, which are eating up
their market share.

4. Overcapacity:

Overcapacity is a big problem for airlines. Most major airlines in the industry still struggle to get
a grip on the constant changes, and many carriers have been seen to be slow to adapt to the
changing economic environment. When capacity exceeds demand, airlines are unable to charge
higher fares to offset their costs without risk of losing market share, and airlines have had to
suffer from rock bottom fares. These fares directly lead to major revenue problems for the
airline.

Along with these factors, the coronavirus outbreak has been highly disruptive for aviation sector,
threatening the survival and sustainability of airlines. Apart from massive losses attributed to suspended
operations, industry foresee a grim recession ahead. With the airline industry being the worst hit sector
due to restricted movements, the industry expects a huge decline in its passenger load even post covid.
The social distancing practices which are to be follows by airlines also reduce the planes seating by 40%-
50% as many seats will be left empty between the passengers keeping the operating prices of aircrafts
the same or even higher while income generated from the flights will be very low.

India’s aviation industry has a huge potential and offers huge growth opportunities, but post lockdown
business will not be the same. To overcome the present challenge of covid crisis, optimal utilization of
resources, cooperation rather than competition, and cost optimization seem to be the possible way-outs
for sustaining with commercially viable take-off on rough terrain.

In the present scenario where there is a severe decline in passenger traffic, air cargo can play an
important role in the airlines profitability at this point as travel is restricted and air transport seems to be
the only way for distance shipments. Cargo-cum-passenger model is an effective way for this as airlines
can make the best out of both, earning as much as they can with passengers while utilizing the empty
space for cargo in the cargo hold as passenger luggage has substantially decreased and sometimes also
accommodating cargo in the unutilized seats. Some airline have also started engaging passenger aircrafts
entirely with cargo even converting the belly space of the aircraft for holding the cargo load such as
Indigo and Spicejet, but these aircrafts sometimes experience the problem of freight orders exceeding
the airlines fixed capacity.

The low passenger count along with the lockdown for long periods of time has been drastic for the
fragile airlines business distressed with thin margins, liquidity crisis, over mounting fixed cost and debt. It
has been a drain on the cash reserves of airlines dragging them towards insolvency. Sustainability of

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airlines warrants of turnaround changes in their revenue strategies and operating models. Rather than
focussing on profit maximization, airlines should focus on minimizing losses to combat the current
situation.

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