The churn in Indian aviation

The travails of the Indian aviation sector, in general, and Kingfisher Airlines, in particular, have been in the spotlight over the past fortnight. It is a paradoxical situation.
On the one hand, India is among the countries with the fastest growing passenger traffic (in the mid to high teens). On the other, high costs (primarily that of aviation turbine fuel) and the inability to raise fares even to break-even levels has meant that all the listed players have been posting big losses over the past three quarters.
Compounding the woes for players such as NACIL, Jet Airways and Kingfisher Airlines is huge debt and massive accumulated losses. Amidst talks of an imminent shakeout, it is noteworthy that Indian aviation is not unfamiliar to churn.
The first round of consolidation happened in the mid-1990s when airlines such as Damania Airways, East-West Airlines and ModiLuft which had opened shop after the ‘open skies' policy of 1991 either shut down or sold out, due to lack of management bandwidth or financial constraints. It was an era of high fares which made air travel a luxury restricted to business executives and moneyed individuals. This scenario continued till the early part of the last decade.
20/11/11 Anand Kalyanaraman/Business Line

To Read the News in full at Source, Click the Headline

Categories: Indian Aviation- In General Nov 2011