Airlines are flying in a 'comfort zone'

Mumbai/Bangalore: After flying low in the initial months of this year, airlines are gradually gaining altitude as yield -- or net revenue per seat -- and demand situation improve.
This trend is reflected in the International Air Transport Association's (IATA) Airlines Financial Monitor for October-November published on Tuesday, which said in the third quarter -- July-September -- 75 major airlines turned a loss of $3.4 billion in the same quarter last year into a profit of $0.7 billion.
However, despite improved financial performance of some carriers over last year, the Geneva-based air transport body has maintained its earlier forecast for an industry of $11 billion this year.
The domestic airline industry is also upbeat about the improving market condition and expecting the next two quarters to be better than last year's.
Samyukth Sridharan, chief commercial officer (CCO) of SpiceJet Ltd, said going by the environment in the last four months, the industry was optimistic about coming months too.
M Thiagarajan, managing director of Paramount Airways, said most local carriers have performed better in the last two quarters of this year compared to the same quarters last years.And he believes they would be able maintain the good numbers in the coming two quarters too with prevailing favourable market conditions.
Thiagarajan feels a stronger rupee against US dollar is also beneficial for the airlines, whose 60% of the operational costs - lease rentals, salaries of expat pilots, aircraft maintenance, spare parts and others -- are denominated in the US currency.
An analyst with a local broking firm predicted that most airlines will see a surge in yields and PLF in the December quarter.
02/12/09 Ramiya Bhas & Praveena Sharma/Daily News & Analysis

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Categories: Indian Aviation- In General Dec 2009