India airlines eye turnaround, funding woes linger

Mumbai: India's aviation industry, which is expected to lose $2.1 billion in 2009/10, is cautiously expanding routes and adding capacity as an economic recovery sets in, but fund raising continues to pose a challenge.
"Return to growth was sharper than we expected because of impressive economic growth and significant capacity reduction by airlines, especially Jet and Kingfisher," said Kapil Kaul, Chief Executive Indian subcontinent and Middle East, Centre for Asia Pacific Aviation (Capa), an aviation consulting firm.
In the last two years, the airlines sector in India and globally had been battered by a spike in fuel prices and economic slowdown resulting in lower travel spends.
The past few months though have thrown up evidence of a turnaround with travellers returning and passenger traffic grew 20.54 percent in Jan-March over a year ago, government data showed.
All private carriers posted seat factors of over 72 percent in Feb-March, while three budget airlines- SpiceJet, Indigo and Paramount - recorded over 75 percent. Jet Airways, India's top private carrier by sales, reported around 80 percent load factor for international routes. "We are happy with the bookings we have recieved for April to June.
Volume driven yields will go up," said Raj Sivakumar, vice president, revenue management, Jet Airways. The new-found confidence is prompting airlines to reach out to newer overseas locations though the pace of expansion is more measured now than what was seen in 2008, before the slowdown hit.
While Jet has launched a daily Mumbai-Johannesburg flight, Kingfisher has received approval for seven new international routes and budget carrier SpiceJet is getting ready to make its international debut.
15/04/10 Reuters/Economic Times

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Categories: Indian Aviation- In General Apr 2010