IndiGo and SpiceJet Fights for Cabin Crew to Manage Margin Pressure

Tata's Air India could take the lead, and Jet Airways and Akasa Air pose competition risks for IndiGo, SpiceJet, and Go Air.

Highlights

  • IndiGo shares dropped 4% intraday as investors anticipated a potential staffing shortage.
  • In particular, pilots on airline crews require years of training.
  • Therefore, analysts believe relief from the talent shortage strain may take some time even if incumbent or younger airlines decide to hire new crew members.

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Investigation into the flight delays experienced by low-cost carrier IndiGo last Saturday has reportedly been opened by aviation watchdog Directorate General of Civil Aviation. The majority of its flights were delayed.

Following the revelation, the airline's shares dropped 4% intraday as investors anticipated a potential staffing shortage.

And IndiGo might not be the only one. Three new participants are competing for pilots and cabin crew members: Jet Airways, Rakesh Jhunjhunwala's Akasa Air, and Air India under its new management. This occurs after the coronavirus epidemic, when the established players were attempting to gain ground.

Deven Choksey, Managing Director of KR Choksey Investment Managers, told Business Standard that the Indian aviation industry is now operating in the most competitive and unfriendly climate. Tata's Air India could take the lead, and Jet Airways and Akasa Air pose competition risks for IndiGo, SpiceJet, and Go Air. Cost increases and margin pressure are inevitable in this circumstance. And this circumstance is unavoidable.

In particular, pilots on airline crews require years of training. In addition, a single aircraft requires a crew of 15 people on average.

Therefore, analysts believe relief from the talent shortage strain may take some time even if incumbent or younger airlines decide to hire new crew members.

In addition to that, the industry is also suffering from record-high aviation fuel prices and a depreciating rupee.

Datchanapriya is a journalism and mass communication student from Chennai. Has always been passionate about writing and connecting with people.

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