‘Excess capacity, main reason for aviation sector losses’

Mumbai: The main reason for Indian aviation industry running into losses is not the high price of Aviation Turbine Fuel, say senior industry experts.
In fact, it is the excess of capacity in the airline industry that is putting pressure on the airlines and the current fares are not covering costs, said Mr Saroj Dutta, Executive Director of Jet Airways.
Speaking at South Asia Aviation Finance Conference in Mumbai, Mr Datta said, “In India we have been very free to increase fares with the rise in global ATF prices. So how far can we blame the rise in fuel prices to the plight of Indian carriers?”
Agreeing with the argument, Mr Dinesh Keskar, Senior Vice President, (Sales) Boeing Commercial Airplanes, said that large number of wide-body aircraft would not be sustainable by the Indian aviation industry for serving domestic market.
With the large capacity (through more airplanes) coming in, airlines are finding it difficult to reach a break even load factor, he said. He also added that bigger the aircraft the fuel burnt would be more leading to higher operating cost.
14/02/08 Business Line

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Categories: Indian Aviation- In General Feb 2008