SpiceJet sees aviation capacity shortfall by end-2010

India's aviation industry will run out of capacity in the second half of the next fiscal, pushing up yields, if demand improves at the current pace, the chief executive of low-cost carrier Spicejet said on Wednesday.
"We (industry) will run out of capacity by July. But if we are less optimistic (about demand growth), then also we will run out of capacity by the end of this calendar," Sanjay Aggarwal told Reuters in an interview.
India's domestic air passenger demand went up 35% but capacity increased only 10% in December, as per data from industry regulator Directorate General of Civil Aviation.
Aggarwal says continued improvement in demand will boost yields, or average fare per customer, to "mid Rs 3,000" level from the current "low Rs 3,000" level for low-cost carriers in second half of next fiscal.
SpiceJet reported a profit of Rs 108 crore in Oct-Dec against a loss a year ago. Strong demand, capacity reduction, lower fuel cost and cost rationalisation helped Jet Airways also to post a profit of Rs 105 crore but rival Kingfisher Airlines posted a loss of Rs 419 crore on exceptional items and expenses incurred on grounded aircraft.
A tight demand-supply situation though will not encourage airlines to order new planes, Aggarwal said. "All the lessors out there are bearish when it comes to increasing exposure to India."
Airlines usually buy and sell new planes to aircraft lessors to lease it back for operations.
03/02/10 Moneycontrol.com

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Categories: Indian Aviation- In General Feb 2010, spicejet Feb 2010