Low-cost carriers may fly high this results season

Mumbai: Analysts feel most airlines’ Q2 results may just fall short of the mark as less passengers took to the skies in September. There’s a saving grace though. Low-cost carriers are seen to report better EBIDTA (earnings before interest, taxes, depreciation and amortisation) margins on the back of operational efficiencies.
According to statistics made available last week by the Directorate General of Civil Aviation , India’s airline regulator, airlines carried a total of 3.91 million passengers in September, up 11.58% from the same month last year, but down when compared to 4 million in August and 4.1 million in July for this year.
Experts expect low-cost carrier SpiceJet to post a 30% uptick in sales to Rs 547 crore during the second quarter despite a smaller fleet size. They, however, differ on profit figures. An aviation analyst with a brokerage firm said the airline will post a net profit of Rs 40 crore. But Rashesh Shah, aviation analyst at ICICIdirect.com, said the airline will incur a loss of about Rs 70 crore. Unlisted low-fare carrier IndiGo surprised many when it announced its results for 2010 with a net profit of more than Rs 500 crore.
Other listed carriers Jet Airways and Kingfisher Airlines are expected to be in the red because of seasonal factors. Jet's revenue growth is likely to be 18% year-on-year, down by 9% over the first quarter of this year.
Kingfisher Airlines is expected to suffer a loss of Rs 250 crore. The airline will see a growth of 16.8% year-on-year in revenues, down 22% from its first quarter revenues with estimated sales of Rs 1,333 crore for the second quarter, according to Mr Shah.
25/10/10 Manisha Singhal/Economic Times

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Categories: Indian Aviation- In General Oct 2010, Low Cost General Oct 2010