The stock market is increasingly getting jittery about the bad news swamping the economy. A host of factors such as inflation, slump in industrial output, higher oil price and so on, is keeping the market on tender hooks. Also, Indian carriers expect to lose up to Rs.10,000 crore, this fiscal year as oil is showing no signs of cooling off and hovering around $146-147. Jet fuel now accounts for over half of airlines operating cost. Hence, many Indian carriers are struggling for survival.
Due to the above mentioned situation, the Indian aviation industry is taking cost cutting steps like the way they never had before. In order to survive, the airlines are grounding planes and canceling flights. Some airlines are now looking at sending their expat. pilots back and replace them with desi ( local ) ones. It is a known fact that nearly 70 to 75% of an airline’s total salary bill is on cockpit crew. On an average an expat. Commander gets a net salary of Rs.4 lakh along with expensive accommodation. He or she works for six weeks and then get two weeks off. An Indian captain has a gross salary of Rs.4 lakh with no accommodation. Hence, the airlines have now decided to take every expense seriously and try to find out ways to cut down on unnecessary costs or expenses that can be brought down in order to deal with the losses due to high operating costs within the airline.
Looking at the above situation it would not be a wise option to invest in Aviation industry sector and I am keeping myself away from sectors like Aviation.