Aviation analyst at Angel Broking Sharan Lillaney tells CNBC-TV18 that airlines need to hike prices by another 10-15% to make decent operating margins. going ahead. “If they cannot increase ticket prices, how will they ever make any kind of profits,” he said.
The DGCA last week warned private airlines against hiking airfares by a huge margin. This further increased the burden on airline companies that are already reeling under a ost of other negative factors. “For the nine months up to December 2011, SpiceJet lost Rs 356 crore as compared to a profit of Rs 159 crore for the nine month period up to December 2010,” said SL Narayanan, group CFO of Sun Group, which has a substantial stake in the airline.
Reacting to the DGCA directive, Lillaney says that interference from the regulator will be negative for companies. “If they cannot increase ticket prices, how will they ever make any kind of profits,” he questioned.
14/05/12 CNBC-TV18/Moneycontrol.com
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