India’s private airlines land back in profit

Mumbai: Some of India’s money-losing private airlines declared soaring profits in the December quarter, beating analysts’ estimates and indicating strongly that the country’s ailing aviation industry is on the cusp of economic recovery after a turbulent year.
Jet Airways, the country’s largest private carrier, posted a profit of 1.05 billion rupees (Dh83 million) in the December quarter, its first profit in three quarters, while Spice Jet, the second-largest low-fare airline, posted a profit of 1.08bn rupees.
This was just the news the industry was waiting for after India’s private airlines collectively lost US$2bn (Dh7.34bn) last year.
Both airlines, which reported a loss of 10.32bn rupees and 3.52bn rupees respectively in the 2008-2009 fiscal year, were buoyed by improving passenger numbers and the low cost of aviation fuel.
Kingfisher Airlines, the second-largest private carrier, posted an operating profit of 110m rupees, although its net losses touched 4.2bn rupees.
The global airline industry has been hit by a severe downturn, although Asia-Pacific carriers are expected to post the most dramatic financial improvements this year, the International Air Transport Association said.
India’s aviation market, the ninth-largest in the world and fourth-largest in terms of domestic passenger volume, expanded by 7.5 per cent last year compared with the previous year, the airline regulator said.
Passenger volume surged by 3.07 million last year, taking the total number of passengers to 43.8 million. The number had contracted to 42.8 million in 2008. Some 4.4 million people travelled by plane last month alone, a 35 per cent increase on December 2008.
“The airline sector is exhibiting strong recovery, not just due to an increase in passenger traffic but also bottoming of yields,” said S Arun, a senior director at DSP Merril Lynch, a global brokerage.
But the industry still faces several challenges that could dampen the new-found exuberance, analysts say. Despite the impressive numbers, airlines are cautiously optimistic.
30/01/10 Anuj Chopra/The National, UAE

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Categories: Indian Aviation- In General Jan 2010