Fairwinds blowing on aviation horizon

After seeing their earnings touch rock-bottom owing to a series of issues including the recent worldwide recession, there seems to a faint light at the end of the tunnel for the airlines industry both in India and around the globe. Not that the industry is raking in huge profits but losses are being reduced significantly. And that includes the crisis-ridden Air India!
There is a visible increase in passenger traffic but then losses of many airlines have not been wiped off. True, leading private carrier Jet Airways posted a 10.5 per cent increase in net profit to Rs 58.6 crore in the fourth quarter of 2009-10 over the same period in 2008-09. Low-fare airlines Indigo and SpiceJet have reported profits for the year, the second one registering net profit for the first time ever. Private carrier Kingfisher Airlines reduced its net loss to Rs 1,647 crore for 2009-10, compared with Rs 2,140 crore it posted in the previous year. Jeh Wadia-owned GoAir made profits at the operating level while Paramount Airlines, now left with just one aircraft after technical trouble and payment disputes with lessors, too turned black. As regards the state-owned Air India, it posted a 9.7 per cent decline in net loss to Rs 1,473.85 crore in the October-December 2009 quarter, from Rs 1,632.23 crore in the corresponding period of previous year.
The return of better times for aviation firms has been something they were desperately looking forward to for the last two years. The airlines in the country had together incurred losses of about Rs 9,340 crore in 2008-09 forcing the carriers, especially the budget ones, to rationalise their expansion plans. Full-service carriers had to scrap some flights and turn some of their aircraft to their no-frills or low-fare affiliates.
Domestic air traffic has seen a reviving trend over the past few months.
Airlines have achieved high levels of seat factors, as well as yield growth. Industry traffic grew by 21 per cent in the fourth quarter of 2009-10, as compared with the same quarter in 2008-09. The total domestic passengers carried by the domestic airlines in the first quarter of 2010 — January to March — was 118.53 lakh as against 98.22 lakh during the corresponding period of 2009. Almost every airline increased its market share. Low fare carriers have been in the forefront in this regard as they corner, according to one estimate, more than 70 per cent of the tickets sold in India.
14/06/10 B S Arun/Deccan Herald

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Categories: Indian Aviation- In General Jun 2010