Why do domestic airlines in India crib all the time ?

Why do domestic airlines in India crib all the time? It’s understandable to feel low in a depressing business environment, but cribbing and dropping your pants when the sentiment and business is good and there are enough opportunities to make money, calls for a callous attitude. Airlines in India are doing this for a long time and I believe they have perfected the art of ‘cribbing’.

They say we are bleeding and they show a highly levered balance sheet with enough operating and financial leverage and blood spread all over it to substantiate their claims. They blame the adamant attitude of government in its reluctance to open up FDI in the industry, they also blame the high oil prices (they should rather say volatile oil prices), arm twisting by regulators and airport operators to be the reasons for an ‘unsustainable environment’. I have my reservations against all this blame game by the airlines and would like to classify this as nothing short of hardcore lobbying. Some entities have in fact gained out of this lobbying by convincing lenders and regulators of measures like debt recast and delayed payments to state owned suppliers.

Lets take up these issues, they say high operating and financial leverage, I say don’t blame me for the mess you’ve created yourself. Airline as a business is tradionally categorized as a highly leavered business (particularly operating leverage), but the amount of leverage a business wants to take while maintaining its survival is entirely the prerogative of its management. We never told you to leaver your business way in excess of what is required and thus grow too fast and threaten your survival in a relatively depressing business environment.

You say high fuel prices, I say they were not always high and you were not unaware that oil does indeed have a tendency to spike in the short and medium term. You may have heard of currency hedging to cover foreign exchange risk, but don’t tell me you’ve never heard of hedging you fuel requirements. Or is it that  your equity is a very small percentage of what is at stake and you don’t mind taking extra risk by not hedging fuel if that means saving some bucks (option cost).

 

You also say you are arm twisted by regulators and airport operators, well I say regulation has only played a positive role in easing up your life by allowing free pricing (airlines had to file and get approval for fares from DGCA in the past). Infrastructure is getting better and you are at least better off reltive to industries like insurance and telecom (which are also service industries and driven by the same level of importance to the country)

You say allow FDI in airlines, well I second that too but that is by no means an impediment to your underperformance.

Airlines, there’s enough of cribbing and fooling the nation, get real and show us balance sheets which reflect the true state of affairs. We’ve not been greased by your bosses and we don’t believe the figures you are projecting.