Sunday, January 14, 2007

Full-service carriers preoccupied with financial health

New Delhi: Air traffic in India may be witnessing an explosive growth, but major full-service airlines are striving hard to protect their bottom-lines in the face of stiff competition from low-cost carriers (LCCs).
High fuel costs and the on-going fleet acquisition programmes of almost all major carriers are also factors adversely affecting their financial performance.
Even as the aviation market continues to mature, concerns are being expressed over these factors with the newly-floated umbrella outfit, Federation of Indian Airlines, also asking the carriers not to undercut each other by fixing fares lower than a certain floor level.
While a `J` curve is being projected for the Indian aviation sector, experts feel that the LCCs would enhance their market share in the coming years during which major full-frill airlines would strive to protect their bottom-line, hit by high costs of fuel and fleet acquisition.
As per industry projections, the Indian aviation sector was poised for a major jump like china, which grew from 28 million passenger trips in 1998 to 125 million in 2005. The growth in India started only in 2002 and is estimated to record an average growth rate of 35 per cent by 2009.
14/01/07 Zee News
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