Domestic carriers slash aircraft orders

New Delhi: After a bruising year that saw domestic airlines defaulting on vendor and lease payments, carriers in India have pulled back at least one-third of the orders they had placed with plane makers for delivery this year, an analysis by Boeing Co. shows.
Commercial plane makers Boeing, Airbus SAS and Empresa Brasileira de Aeronautica SA (Embraer) expect to deliver some 57 aircraft to India this year, down from the 91 projected in mid-2008, according to research by the US plane maker reviewed by Mint.
Indian carriers are struggling to fill up seats amid overcapacity and slowing economic growth that are expected to saddle them with a collective loss of about $2 billion (Rs10,100 crore) in the fiscal year ending 31 March. In January, airlines filled just two-thirds, or 3.3 million, of their 5.06 million seats, showed the data collated by Boeing.
“One of the problems you hear—about the reasons for $1.5-2 billion losses in the industry—is that everybody is trying to sell (tickets) below cost. That’s not their choice because there is simply too much capacity,” said Dinesh Keskar, president of Boeing’s India unit. “And, when that happens, fares go down.”
In 2008, air passenger traffic in India fell after surging for the last six years. The airlines carried 43.3 million passengers in 2007, more than three times the 13.3 million flown in 2002. In 2008, the figure fell to 40.77 million.
Slumping passenger demand and record high prices of jet fuel prompted airlines across Asia to pull back several daily flights starting in the summer of 2008. Last year, India’s domestic airline capacity shrank by 8%. That compares with a 3.5% pull-back in Japan and an 18% addition in China.
Indian carriers also led a pack of 20 Asian carriers that significantly pared market capacity last year, according to Boeing. Between February this year and the same month of 2008, at least half of the 20 top airlines in Asia cut capacity.
India’s Kingfisher Airlines Ltd led the list of Asian carriers with a 17.1% reduction, followed by Singapore Airlines at 8.3%, Thai Airways at 7.7%, Jet Airways (India) Ltd and Japan’s All Nippon Airways Co. at 6.2% each, and National Aviation Co. of India Ltd-run Air India’s 5.3%.
Air India has a fleet of 150 aircraft, followed by Jet with 111 (some of its planes have been leased out), and Kingfisher with 76. All three have seen their losses increase sharply.
30/03/09 Tarun Shukla/Livemint

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

Categories: Indian Aviation- In General Mar 2009