Airlines to pull out more planes, reduce seats by 30%

Mumbai: India’s loss-making domestic airlines would have to ground at least 25 planes in the next 12 months as fewer passengers opt to fly, three airline executives said.
Overall, the carriers would be forced to reduce the number of seats by 30% to arrest losses, either by cancelling flights or reducing frequencies, they added.
At present, India’s airlines have about 400 passenger planes flying. Even after airlines tried to attract passengers with steep discounts, passenger traffic fell nearly 17% in the peak October-January season, according to data released on Monday by the ministry of civil aviation.
In the December quarter, carriers trimmed capacity by 8% by grounding some planes. Many carriers have stopped flying on loss-making routes and lowered frequency in sectors with low demand.
“Airlines are witnessing turbulent times as the economic slowdown is set to spoil the travel plans of corporate India,” said one of the three senior executives mentioned earlier. “As air passenger growth continue(s) to fall, we have no other way but to cut the capacity. You will see at least 30% reduction in the capacity. Airlines (will) either cancel flights or club two flights.”
As of now, airlines are looking to freeze or slow expansion, said another senior executive with a full-service airline.
Already, except state-owned National Aviation Co. of India Ltd (Nacil), which runs Air India, all other airlines have frozen or are slowing expansion. Nacil will take delivery of nine or 10 planes for its domestic operations, but will not renew the leases that are expiring this year, a senior Nacil executive said.
UB Group, the promoter of Kingfisher Airlines Ltd, in an investor presentation in late January, said the airline has reduced 21% of its flights, resulting in nine surplus planes.
“We have also implemented a 12-15% reduction in the domestic capacity, whereby, we have four Boeing 737 which we have withdrawn from service. These aircraft will be returned to the lessors between January and May 2009,” said Wolfgang Prock-Schauer, chief executive of Jet Airways.
This year, the airline may add only some ATR planes, which are small aircraft capable of carrying up to 70 passengers.
Airlines incur high expenses in grounding aircraft or returning planes to lessors before a contract ends, in rent or penalties.
17/02/09 P.R. Sanjai/Livemint

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Categories: Indian Aviation- In General Feb 2009