Airlines to post nearly Rs 500 cr losses in Q2

The aviation sector is likely to post collective losses of around Rs 500 crore for the July-September financial quarter on account of softening yields per passenger and record fuel prices in the initial days of the quarter, say analysts. Losses for individual airlines in the comparable period last year were Rs 37.8 crore for low cost carrier SpiceJet, Rs 253 crore for Simplifly Deccan (erstwhile Air Deccan) and Jet Airways posted marginal profit of Rs 28 crore. It is estimated that the sector will collectively post losses of Rs 4,000 crore in the 2008-09 fiscal.
The second quarter financial results (it’s Q1 for Deccan) are likely to be adversely hit due to the air travel dipping drastically by almost 30% due to higher fares in accordance with the high crude oil prices. Aircraft movement at all metro airports has dipped including that of Mumbai and Delhi.
Citing various reasons for the poor performance of the sector, analysts say that domestic travel has dropped drastically as middle level officials at corporate houses and even leisure travelers are forced to cut down on air travel.
Naresh Goyal, chairman, Jet Airways, while addressing shareholders at the company’s AGM, had said that fuel is the most expensive component for Indian carriers as it is nearly 60% highly priced than its counterparts across the globe.
It may be noted that like other sectors, even the aviation industry is downsizing its staff to curtail their expenses. Airlines like state-owned Air India has even chalked out a 30-point strategy to contain their costs after having reported losses to the tune of over Rs 2,000 crore for the 2007-08 fiscal.
11/10/08 Shaheen Mansuri/Financial Express

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

Categories: Indian Aviation- In General Oct 2008