Mounting losses likely to fuel more M&As in aviation space

Mumbai: Jet Airways and Kingfisher Airlines may move towards a second round of mergers and acquisitions as smaller low-cost airlines and other rivals, hurt by rising fuel prices, seek an exit from the business to cut losses, an industry expert said.
State-run oil firms have hiked jet fuel (aviation turbine fuel) prices by 18.5 per cent in line with rising international crude oil prices.
"There are chances that we will see players exiting by the end of the year. There might be casualties and damage. If the bigger players, like Kingfisher and Jet, get the right price, they might acquire other airlines," Kapil Kaul, CEO, Centre for Asia Pacific Aviation (CAPA) - Indian sub-continent and West Asia, and aviation consultant, said while speaking to Business Standard.
CAPA, which had earlier forecast the losses for the industry at $700 million for the current financial year, is revising the forecast after the fuel costs have spiralled and even crossed $135 per barrel earlier.
The aviation industry has seen mergers of national carriers Indian and Air India, and acquisitions of Air Sahara and Deccan by Jet Airways and Kingfisher, respectively.
Ahead of the possible acquisitions, Kaul said airlines will also look at meaningful partnerships.
02/06/08 Manisha Singhal/Business Standard

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Categories: Indian Aviation- In General May 2008