Just when the Indian aviation sector seemed to be soaring, global financial calamity and surging crude oil prices conspired to clip its wings. Now, even as airlines scramble to find ways to mitigate the crisis, industry pundits sound a positive note.

Boom to gloom... to doom? Assuredly not if recent overtures to rectify and rejuvenate tottering Indian airlines are any indication. Buffeted by the global hot winds of recession, the Indian aviation sector is unlikely to witness western style financial meltdowns, vouch the industry’s top brass. The Indian aviation industry will come out stronger, because we have learnt several lessons in this period. This will also lead to reduction of flab, particularly at the operations end, Air India Chairman and Managing Director Raghu Menon recently observed. Echoing the optimism, Vice President Airbus Industrie Kiran Rao expressed confidence that the Indian market was very resilient and would definitely bounce back. It has seen the impact of two Gulf wars, SAARC epidemic and 9/11 terror attacks on the twin WTC towers. Everyone thought this will be the end, but it was only a blip. During the current crisis, too, aviation industry will emerge stronger, he said.

So, how is the civil aviation sector shaping up to take on present and future challenges? In retrospect, the recent Goyal-Mallya (GM) alliance may prove consolidation to be the real mantra for survival in the highly volatile aviation market. For instance, InterGlobe Enterprises-owned IndiGo airline is reported to be in the process of a 50/50 merger with Shivraj Airways Charters Ltd even as SpiceJet in apparently in cahoots with US billionaire Wilbur Ross for a $80 million (Rs 380 crore) investment as a starter. GoAir and Paramount are also said to be exploring an alliance strategy. Interestingly, four major private airlines first combined into two—Jet Airways-Air Sahara and Kingfisher-Air Deccan—and subsequently, less than two years later, have merged into one entity (at least operationally). Almost simultaneously, the two national carriers, Air India and the Indian Airlines, along with their subsidiaries Air India Express and Alliance Air, became one entity under a single brand name, Air India. For the remaining smaller players also consolidation may be the only key to survival. In the future, three major forces could define the Indian airlines industry—Air India and the GM-combine competing in all segments of international and domestic businesses even as a third combined force takes them on in the domestic low-cost model.