Distress may spread to Indian skies

Mumbai: The year 2008 could spell disaster for the global airline industry as a continuous surge in oil prices in a competitive fare regime is making operations unviable and squeezing credit line. Some Indian players may also be vulnerable.
Four airlines, three from the US — ATA Airlines, Aloha Airlines and Skybus Airlines — and Hong Kong’s Oasis Hong Kong Airlines ceased operations in the last fortnight, primarily due to oil prices that exceeded $110 per barrel.
“This year is going to be tough and we can not rule out this (closing down of operations), possibility in India. Weak carriers are more prone,” said Kapil Kaul, CEO-India, Centre for Asia Pacific Aviation (CAPA), a global aviation consultancy.
Jet Airways CEO Wolfgang Prock-Schauer said high jet fuel prices were making operations unviable and the periodical increase in the fuel surcharge was unable to mitigate the extra financial burden. “See what had happened in the mid-1990s. There were so many airlines and most of them closed down,” the Jet Airways CEO said. As domestic yields get squeezed, airlines like Kingfisher, SpiceJet and Deccan are getting restless to fly overseas.
15/04/08 Lalatendu Mishra/Hindustan Times

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Categories: Indian Aviation- In General Apr 2008