Holiday season fails to lift aviation cos

This was supposed to be the quarter when the aviation industry made its money. But this does not seem to be the case. Although SpiceJet did record marginal profits, industry leader Jet Airways lost more than Rs 90 crore as compared to a profit of close to Rs 40 crore in the corresponding quarter last fiscal. Analysts do not expecting Deccan, whose results are due in two days, to come out in the green either.
Aviation is a highly cyclical business and traditionally the third quarter gives the best results for an airline, as a result of the increase in travel during the holiday season across the globe.
However, the benefits arising from consolidation in the Indian skies, especially those due to better priced tickets, seem to have been not enough to clear the red in the books.
For Jet what seems to have hurt the most is the expenditure to get its international routes going. Along with such start-up costs, high fuel prices are eating into airline numbers. This despite fuel surcharges resulting in more revenue flowing into airline coffers. The growth in other income, primarily due to forex gains, seems to have masked some of the losses.
29/01/08 Nirmal John/DNA Money/Sify

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Jan 2008