Indian airline firms post profits, fly out of slowdown zone

Mumbai: Indian airline firms seem to have recovered from the slowdown just as suddenly as they entered the phase in 2009-10.
The country’s largest airline by passengers carried Jet Airways (India) Ltd reported an operating profit, the second largest low-fare airline SpiceJet Ltd registered its first ever net profit and Kingfisher Airlines Ltd reduced its operating losses by half.
Jet Airways shares fell 2.46% to close at Rs497.80 apiece on the Bombay Stock Exchange on Tuesday while Kingfisher Airlines’ shares also declined 3.68% to end at Rs43.20 each. SpiceJet shares also lost 1.93% to close at Rs55.85 apiece.
Airlines whose shares are not listed, including InterGlobe Aviation Pvt. Ltd (which runs IndiGo) and Paramount Airways Ltd reported net profits in 2009-10, according to executives in the respective firms, although the latter’s fleet has dwindled to just one aircraft after technical trouble and payment disputes with lessors. And the Wadia Group’s GoAirlines (India) Pvt. Ltd (that runs GoAir) made a profit at operating level, said Kaushik Khona, chief executive officer at GoAir.
Together, Indian airlines incurred losses of $2 billion (Rs9,340 crore today) in 2008-09 on the back of low passenger traffic arising from the economic slowdown, high jet fuel prices and excess capacity. That prompted low-cost airlines to rationalize their expansion plans; meanwhile, full-service carriers scrapped some flights and moved many others to their no-frills or low-fare affiliates.
01/06/10 P.R. Sanjai/Live Mint

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Categories: NACIL Jun 2010