Foreign airlines fly faster to breakeven

Bangalore: Now that India’s international air travel demand has picked up, foreign carriers are aggressively introducing new routes and adding frequencies.
Chin Yau Seng, chief executive of SilkAir, the wholly owned subsidiary of Singapore Airlines, said one of the reasons overseas carriers were feeling more confident about launching new flights was shorter breakeven period.
He said owing to the robust demand on many Indian routes it is taking less than half the time it used to take earlier to become profitable.
“Generally, it takes 2-3 years for a new route (in India) to break even ( at the current levels of fares) but looking at the strong demand we expect to break even in less than 12-18 months on our new routes (Bangalore and Chennai),” he said.
And Seng hopes to recover his investment on new routes at yields - net revenue per seat — not very different from last year.
The regional airline of Singapore Airlines on Monday announced the launch of daily services between Bangalore and Singapore at Rs 14,000 per passenger - including taxes. Next month, it will start daily flights from Chennai.
This will take its weekly frequency in India from the current 20 flights to 34 flights, a 70% jump in just one month. At present, it flies to four destinations -Thiruvananthapuram, Kochi, Hyderabad and Coimbatore.
20/05/10 Praveena Sharma/Daily News & Analysis

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Categories: Foreign May 2010