The Indian airline sector experienced the year 2008 as the dark year. The report of the International Air Transport Association revealed out that various airline flights services of India lost $5 billion in year 2008 which never be forgotten by the airlines group. A lot of factors contributed to this condition of airline industry of India which includes
1. Quick Success
2. Global economic crisis
3. Increasing Demand of airplanes
Quick Success: Following Air Deccan’s quick success after its launch, several carriers i.e. GoAir, Indigo, Kingfisher Airlines and SpiceJet began their operations. In the initial phase as the market had huge potential but the various airlines faced the problem of finding the investors for them. The various airlines ordered many new airplanes which increased the expenditure of the airlines. In 2003 fewer than 16 million passengers flew in India domestically in the entire year which brought new competition came much cheaper air fares, which led to soaring demand. Business flourished for some time and year-on-year traffic growth was enormous.
Global Economic Crisis: The global economic crisis played a major role to force the airline flights services to get this worst situation of suffering so huge loss of $ 5 billion in year 2008. The crisis resulted in reduction from and airline flights to India which also resulted in reduction of number of airline passengers which ultimately affected the net gain of the airlines. The whole process brought sad news for various employees for various airlines as many airlines lay off their employees and the staffs were told to rest at their home.