Wednesday, September 13, 2006

Airlines fly into Rs 2,100 cr loss; shake-up looms large

Mumbai: Domestic airlines are flying into turbulence. Plagued by higher fuel prices, infrastructure constraints, declining yields and load factors, the domestic airlines are together losing nearly Rs 6 crore a day. This means they could together tote up losses of Rs 2,100 crore, or $486 million, in the next one year.
This was the estimate of losses by experts at the Indian Travel Congress, which was held at Hyderabad in the first week of September.
Air traffic has been growing at a scorching 40 per cent per year. But airlines have also been adding capacity at a frantic pace. Four years ago, Indian operators had 121 aircraft. Today, there are more than 200. In the next two years, the country will have 400 civilian planes, and 550 planes by 2010.
Is the market ready for it? “If the market grows at 30-40- per cent, the airlines may manage to keep their heads above water. But if the market doesn't grow at the same pace as capacity, airlines will be forced to discount,” says a Mumbai-based aviation expert, who does not wish to be named.
12/09/06 Ranju Sarkar/Hindustan Times
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