Expect airlines to fly back into profit

Mumbai: Rising ticket prices, high seat occupancy rates and slower induction of planes into fleets may help India’s domestic airlines—competing tooth-and-nail in the past few years to grab shares in a market that is almost doubling every two years—record a small profit for the just ended fiscal third quarter.
Industry executives and analysts admit the results of the quarter ended 31 December, traditionally the busy season because passenger traffic climbs sharply over the holidays, may not be sustainable. But rising ticket prices, a result of consolidation in the industry, is likely to help these airlines, even in the long term, to post profits.
And, late Monday, in a move that will also help airlines’ bottom lines, India’s public sector oil firms, the major suppliers of ATF, or aviation turbine fuel, cut prices by 4%, the first reduction since September and in line with global trends. Fuel alone accounts for 40% of the airlines’ operating costs.
Kingfisher Airlines Ltd and its affiliate Deccan Aviation Ltd, which runs Simplifly Deccan, are both likely to fly back into the black, said a senior executive of the UB Group, which owns Kingfisher through a set of subsidiaries.
31/12/07 Livemint

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Categories: Indian Aviation- In General Jan 2008