Non-passenger monies keep airlines airborne

Bangalore/Mumbai: Shrinking passenger traffic is forcing airlines to aggressively look at non-passenger revenues, to keep their total revenues from crashing to the ground.
In good times, incomes from onboard services, cargo, aircraft leases and other such offerings were the icing on the cake, but today, these sources are propping up total incomes at many airline operators.
In the December quarter, full-service operator Jet Airways earned a whopping Rs 3,871 crore ($ 7.9 million) from just selling its slots at the London Heathrow Airport (LHR) and wet-leasing its aircraft.
It could have been this non-passenger income that could have helped it show a growth of 87% in its international revenue, even when its domestic revenue had slipped 14%, compared to last year.
Going forward too, the Naresh Goyal-owned airline would be earning substantially from these avenues.
In his interaction with analysts on Monday, Wolfgang Prock-Schauer, CEO, Jet Airways estimated that his airline would be earning roughly $2-2.2 million per month per aircraft from wet leases.
Jet's low-cost subsidiary, JetLite, is also chasing ancillary revenues such as in-flight advertising, catering and in-flight sales.
Jet's budget airline is also eyeing fuselage -- exterior of the aircraft body -- advertising, which can earn it revenues of Rs 50-60 lakh per month.
JetLite's rival no-frill carrier SpiceJet has added paid services on its aircraft.Over the last one year, it has tapped every source of ancillary revenues from merchandising lifestyle goods and selling insurance to in-flight advertising and hawking meals onboard.
Kingfisher Airlines, on the other hand, has only marginal revenues coming from ancillary activities like duty-free sales and advertising in in-flight entertainment.
Its subsidiary Kingfisher Red, erstwhile Air Deccan, has now started serving meals onboard and hence the additional catering revenues have also stopped.
21/01/09 Praveena Sharma & Archana Shukla/Daily News & Analysis

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Categories: Indian Aviation- In General Jan 2009