Consolidate or exit: Expert to Indian air carriers

Istanbul: With jet fuel prices on an upward spiral globally, a top aviation expert and an industry leader on Tuesday said consolidation or restructuring was the way to go for Indian carriers to beat losses and stay afloat.
"There are a large number of new entrants and there exists a huge amount of capacity in India. Rising fuel costs will accelerate the restructuring of this capacity.
"The new entrants and even large leading carriers will find it difficult to maintain their bottom lines because high costs and high capacity have to be matched. So, it is either consolidate or exit the market," IATA's Chief Economist Brian Pearce told PTI in an interview.
He, however, conceded that there was a tremendous potential for air travel in India, which was also witnessing strong economic growth. "With proper infrastructure in place, there is a tremendous capacity for the Indian market to grow. Travel trade will continue to grow in Asia."
But under the given circumstances, the airline industry in India has to consolidate or go bust, he said replying to questions on the sidelines of the annual conference of the International Air Transport Association (IATA) here.
03/06/08 PTI/Economic Times

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Categories: Foreign Jun 2008, Indian Aviation- In General Jun 2008