Tax-payer money goes waste on flights of fancy

India’s aviation sector, characterised by the country’s two leading airlines, has hit a deep air pocket generated by internal financial turbulence. State-owned Air India and the Vijay Mallya-controlled Kingfisher Airlines need external cash infusion to even pay salaries, leave aside larger he­adaches such as averting repeated defaults on dues to vendors and lenders.
Even in the best of times, the global aviation industry is tough business. The International Air Transport Association (IATA) said profitability for the sector remained weak globally at $6.9 billion or a net margin of a measly 1.2 per cent during 2011. For 2012, IATA has downgraded its forecast for airline profits from $4.9 billion to $3.5 billion or a net margin of 0.6 per cent. In a worst-case scenario, should the euro zone crisis evolve into a full-blown banking catastrophe, leading to recession in the Continent, IATA estimates that the glo­bal aviation business could suffer losses exceeding $8 billion this year.
Fortunately, Asia shines out as the bright spot in this gloomy forecast. The region is home to some of the world’s most respected and profitable airlines, among them, Singapore Airlines, which attests to the better economic potential for carriers serving this market.
20/01/12 Yassir A Pitalwalla/mydigitalfc.com

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Categories: Indian Aviation- In General Jan 2012