Airlines flying in losses on discounted fares

Beset by a string of troubles, the three major listed airline players — Jet Airways, Kingfisher Airlines and SpiceJet — ended yet another quarter with sizable losses. A reduction in fares weighed on realisations and revenues and resulted in continuing losses, even as airlines managed savings in fuel and operating costs.
Both Kingfisher Airlines and SpiceJet have reduced their losses for the quarter, compared with last year, while Jet Airways saw its net loss going up by about 5 per cent to Rs 406.69 crore in the September 2009 quarter. Impacted by the five days of strike in September, Jet Airways was faced with an estimated loss of Rs 100.8 crore ($21 million). This includes the variable cost of cancellation.
A shift in favour of low-cost carriers was evident from SpiceJet registering a near 27 per cent year-on-year increase in income from operations, even as both Kingfisher Airlines and Jet Airways witnessed about 14 per cent and 25 per cent dip in their topline.
Revenues for Jet Airways and Kingfisher Airlines were impacted mainly by falling fares, which they attributed partially to the lean season. However, both airlines, faced with excess capacities, have taken measures to trim their fleet size over the past six months. While Jet Airways reduced its seats availability by as much as 30 per cent (including domestic and international), Kingfisher Airlines made its domestic operations leaner by about 18 per cent compared with last year. The cut back has not only helped companies save on the cost front, but also improved the load factor.
Jet Airways saw its passenger load factor (domestic and international) increase from 66.3 per cent for the quarter ended September 2008 to 77 per cent in the recently concluded period. The company’s domestic and international loads grew by 2.9 per cent and 14.6 per cent respectively in this period. Kingfisher Airlines registered a 1.8 percentage points growth in its load factor during this period.
04/11/09 S. Hamsini Amritha/Business Line

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Categories: Indian Aviation- In General Nov 2009, Jet Airways Nov 2009, Kingfisher Nov 2009, spicejet Nov 2009